How Gold Royalty and Streaming Companies Make Money

Royalty and streaming companies fund mines in exchange for a cut of output. A worked look at the model using Q2 2026 results and Wheaton's Salobo stream.

Key takeaways

A stream buys a fixed share of a mine’s metal at a fixed or low price after a large upfront deposit, while a royalty takes a revenue share.
Wheaton’s Salobo gold stream earned a cash margin of US$4,019 per ounce in Q2 2026, against a US$433 per ounce cash cost.
Franco-Nevada reported an adjusted EBITDA margin of 91.2% in Q2 2026, and Royal Gold reported 83%.

Royalty and streaming companies fund mines and take a slice of the output in return. They do not run the mines, so they carry little of the operating cost. That is why their margins look so different from a miner’s, and why their risk sits somewhere else.

Royalties and streams: the two main contracts

A royalty is a right to a share of a mine’s revenue or production, usually paid in cash. The most common form is a net smelter return, or NSR, royalty: a fixed percentage of revenue after smelting and refining charges. The royalty holder pays nothing per ounce once the royalty is bought.

A stream is a contract to buy a fixed share of a mine’s metal output at a fixed or low price. The stream company pays a large upfront deposit. After that, it pays a delivery payment for each ounce it receives, usually either a fixed dollar amount per ounce or a fixed percentage of the spot price. It then sells the metal at market.

Streams are often on a by-product. A copper miner that also produces gold may sell a stream on that gold to raise money for building or expanding the copper mine, without issuing shares or taking on standard debt.

The three largest, by their Q2 2026 results

Q2 2026	Franco-Nevada	Wheaton Precious Metals	Royal Gold
Revenue	$580.9 million	about $929 million (GEO price x GEOs sold)	$450.5 million
Gold equivalent ounces sold	132,405	209,115	100,000
Cost per GEO	about $347 (cash costs)	$568 (average cash cost)	about $601 (cost of sales)
Margin measure	Adjusted EBITDA margin 91.2%	Cash operating margin $3,875 per GEO	Adjusted EBITDA margin 83%

Gold equivalent ounces, or GEOs, convert silver, copper, and other metals into gold ounces at market prices, so different metals can be added together. Cost per GEO for Franco-Nevada and Royal Gold is calculated here from their reported totals: Franco-Nevada’s $45.9 million in cash costs over 132,405 GEOs, and Royal Gold’s $60.1 million in cost of sales over 100,000 GEOs. Wheaton’s revenue is its reported $4,443 average price per GEO times 209,115 GEOs sold.

For comparison, large gold miners reported all-in sustaining costs of roughly $1,450 to $1,870 per ounce in the same quarter. A streamer’s cost per ounce is its contract price. It does not pay for fuel, labour, sustaining capital, or mine closure.

Royal Gold’s revenue shows the mix. Of its $450.5 million, $311.0 million came from streams and $139.6 million from royalties. Its release notes that cost of sales applies only to streams. Royalties carry no per-ounce cost.

Worked example: Wheaton’s Salobo gold stream

Salobo is a copper mine in Brazil operated by Vale Base Metals. Wheaton acquired its gold stream in three pieces in 2013, 2015, and 2016. The disclosed terms, from Wheaton’s October 2024 Salobo presentation:

Upfront consideration: $3,429 million, excluding an additional payment for the Salobo III expansion
Stream: 75% of Salobo’s gold production for the life of the mine
Delivery payment: $425 per ounce as of that presentation, with a 1% annual inflation adjustment
Security: a Vale S.A. corporate guarantee

Here is how the second quarter of 2026 worked out, using Wheaton’s reported figures:

Salobo, Q2 2026	Value
Gold ounces sold	70,106
Average realized price	$4,452 per oz
Average cash cost (the delivery payment)	$433 per oz
Cash margin per ounce	$4,019
Sales	$312.1 million
Cash margin (70,106 x $4,019)	about $281.8 million
Reported cash flow from operations	$278.5 million
Average depletion	$404 per oz

The $433 per ounce cost is close to the $425 delivery payment plus its inflation adjustment. Depletion, at $404 per ounce, is the non-cash charge that spreads the upfront payment over the ounces Wheaton expects to receive.

The payback math depends on time and price. By Wheaton’s October 2024 count, Salobo had contributed about 2.3 million gold ounces and about $2.4 billion in cash flow since the stream began. That was against $3,429 million paid upfront, over a period when gold was mostly far below today’s level. For a sense of that sensitivity: at $2,000 gold, the price Wheaton used for its reserve estimates in that presentation, the same $433 cost would leave a margin of $1,567 per ounce, 61% less than in the second quarter.

Where the risk sits

A streamer’s costs are fixed by contract, but its revenue is not. Four risks carry most of the weight:

Operator risk. The streamer has no control over mine plans, grades, or shutdowns. Salobo’s attributable gold output fell 11% year over year in the second quarter, which Wheaton attributed mainly to lower grades.
Upfront capital. The deposit is paid before the metal arrives. Wheaton made net upfront payments of about $4.47 billion for stream interests in the second quarter, mainly to acquire BHP’s silver stream interest in the Antamina mine, which lifted Wheaton’s share of Antamina silver from 33.75% to 67.5%. It drew bank debt to help fund it.
Price risk. Margins widen when metal prices rise and narrow when they fall. A fixed delivery payment does not fall with the metal price. Some contracts set it as the lesser of a fixed amount and the market price, as Royal Gold’s Mount Milligan stream does at $435 per ounce. Others set it as a percentage of spot, so it moves with price.
Jurisdiction. A stream is only as good as the mine’s right to operate.

What to watch

Third quarter 2026 results from Franco-Nevada, Wheaton, and Royal Gold, including GEOs sold against guidance. Franco-Nevada said that, including anticipated deliveries from Cobre Panamá, it was tracking toward the upper half of its 2026 GEO guidance range.
New stream and royalty deals, and the upfront amounts paid, disclosed in company releases.
Production reports from the operators of the largest assets, such as Vale for Salobo.
Debt levels at Wheaton after the Antamina purchase, reported in its quarterly balance sheet.

Sources

Frequently asked questions

What is the difference between a gold royalty and a stream?

A royalty is a right to a share of a mine’s revenue or production, usually paid in cash, and the holder pays nothing per ounce once it is bought. A stream is a contract to buy a fixed share of a mine’s metal output at a fixed or low price, after a large upfront deposit. The stream company then sells the metal at market.

Why do streaming companies have high margins?

A streamer’s cost per ounce is its contract price. It does not pay for fuel, labour, sustaining capital or mine closure. In Q2 2026, Wheaton reported an average cash cost of US$568 per gold equivalent ounce, while large gold miners reported all-in sustaining costs of roughly US$1,450 to US$1,870 per ounce in the same quarter.

What are the risks for royalty and streaming companies?

Four risks carry most of the weight. Operator risk: the streamer has no control over mine plans, grades or shutdowns. Upfront capital: the deposit is paid before metal arrives. Price risk: margins narrow when metal prices fall, since a fixed delivery payment does not fall with them. Jurisdiction: a stream is only as good as the mine’s right to operate.