The broadcast is now starting. All attendees are in listen-only mode.
We're very pleased to host David Garofalo, the Chairman and CEO of Gold Royalty, and Jackie Przybylowski, the Vice President of Capital Markets. They're going to tell us all about their property portfolio. Without further ado, David, please begin.
Yeah, John, thanks so much for having us on. I feel like we're going through the cycle again with you, multiple cycles with you, as I go back at least 30 years with you, back to my days at Agnico.
Agnico, Agnico CFO.
Yeah, that's right. And so, you've followed all of my companies over the years. After Agnico, I, of course, joined Hudbay on the copper side, ran Goldcorp for a little while as well before we founded Gold Royalty. Just a little over four years ago, we IPO'd in March of 2021 with a collection of 18 royalties on the assets of Gold Mining, the company we were spun out of, our former parent company. We had a very successful IPO, and we went about growing the company. And really, over the last four years, we spent quite a bit of time building out the portfolio, diversifying, adding scale into it, and creating peer-leading revenue growth in the sector. And that's including the large-cap names. We are by far the largest and fastest-growing royalty vehicle in the space over the course of the next five years.
Not just from a collection of random assets. We have some of the largest scale mines in North America. We have royalties on three of the five biggest producing gold mines in North America. We have royalties on some very large-scale mines outside of North America that we've added and complemented our portfolio with over the course of the last couple of years as we focus on cash flowing, near-cash flowing royalties to supplement and complement the significant growth tail that we have embedded within our portfolio. This year is very much an inflection year. Maybe, Jackie, we can go into the summary slide in that, as I said, we've spent several years building out the portfolio, and now we're at a cash flow inflection standpoint, cash flow inflection point. Whereas last year, we actually had positive operating cash flow for the first time in our history.
This year, we're into positive free cash flow. And it is from a collection of over 240 royalties. Again, we started with 18 royalties at our IPO just a little over four years ago, and now have grown to over 240 royalties with royalties on some of the largest scale mines in North America. Seven cash flowing royalties currently, 14 in various stages of construction and development, underpinning that growth that we'll talk about a little later in the presentation. You can see that early on in our history, in our life cycle in 2021, we had a much more robust multiple. We had a very strong currency coming out of the IPO. We IPO'd at $5 per share.
After the IPO, the stock continued to run north of $7 per share, recognizing the very healthy valuation that we had on those 18 royalties we started with, none of which were cash flowing, none of which were even in development, even though they had a significant mineral endowment. They really did not have a clear line of sight to production. We recognized we really needed to diversify our portfolio from a couple of respects. We wanted to introduce some cash flow and some more immediate growth into the portfolio. We also wanted to diversify our operating partnerships. Those 18 royalties were almost entirely with one operator, our former parent company, Gold Mining Inc. Seeing that there was a collection of small-cap royalty companies that were all struggling for relevance, struggling to raise capital, we started to roll up some of our competitors.
Namely, that included Ely Gold Royalties Inc, Golden Valley Mines, and Abitibi Royalties Inc. What that did is immediately diversified our royalty portfolio by bringing in 150 additional royalties in the portfolio with multiple scores of other operators, but also brought in a royalty on Canadian Malartic, which is one of North America's biggest producing gold mines, and a royalty on Ren, which is the underground extension of Goldstrike. Immediately, by conducting that roll-up, we brought in cash flow to basically keep the lights on but also brought in substantial growth from one of the biggest gold mines in the United States as well. Recognizing that we still had some cash in the treasury, but our currency was starting to erode. As you remember, in early 2022, we saw the gold sector significantly derate as interest rates started to go up.
We recognized we couldn't do M&A accretively anymore. We started to very systematically and in a disciplined fashion deploy some of our IPO capital to start to complement and supplement our portfolio and continue to diversify. We picked up a royalty on Côté, which is now producing and will be Canada's second biggest producing gold mine as it achieves its designed commissioning rate over the course of this year. We picked up a royalty on Cozamin, which is Capstone's highest-grade copper mine and silver producer as well in Mexico. We also did a project- financing with ore Minerals for their Bomboré mine, which just started production about a month and a half ago and already is undertaking a study on expansion, even as it's achieving its design rates of production over the course of this year.
Finally, in terms of cash flowing royalties, we picked up a copper stream on the Vareš mine in Bosnia, which is operated by Adriatic Metals, which is listed on the London Stock Exchange, about a $1 billion market cap company. That mine is operational, has been paying us stream payments for a couple of quarters now, and is expected not only to achieve its design rate of production this year, but has already pre-financed an expansion of about 60% of its production by 2027. They have the capital to undertake that expansion once they achieve their commercial design rates later this year. That is an 18-year reserve life. If there is a recurring theme within the portfolio, we have tried to introduce long-life scalable assets within the portfolio to complement what we picked up through our roll-up strategy over the course of 2021.
Now, as I said, we're at a point where we expect to generate positive free cash flow for the first time in our history. You can see in this graph, which encapsulates the growth that we've undertaken over the last four years, the pace of growth has slackened considerably because our currency has weakened. As you can imagine, growth in our sector has been quite severely discounted, and the market, for whatever reasons, decided they want to pay for growth once it's in the rearview mirror for a quarter or two. With three large-scale mines undergoing commissioning and achieving design rate of production this year in Côté, Vareš, and Bomboré, the market is waiting for proof of concept on those large-scale long-life deposits that are coming into production and achieving design rate of production this year.
Really, we've slowed down the pace of acquisition because we do not have the currency to do so, and really very much in harvest mode right now. We are very much focused on deleveraging the small amount of debt we have on the balance sheet, which I will talk about a little later on in the presentation, and starting to generate positive free cash flow, and importantly, positive free cash flow on a per-share basis to demonstrate the quality of that portfolio, not only in terms of longevity of its reserves, but also its ability to generate significant cash flow and provide leverage to the gold price as it goes up and leverage to the exploration success of our operating partners who are at various points of optimizing these assets, both from a geological and operational standpoint. Jackie, we can skip to the next slide.
I think it's important to understand that we really have a unique model in that we grow through multiple means. There are a number of royalty and streaming companies in our sector that focus on one or two of these pillars of growth. None of them really do all four and do them well. I think that's a testament to the longevity and depth of our management team. Collectively, our small management board has over 400 years of industry experience. There's a lot of skills there. We've come from operational mine development backgrounds, many of us. Some of us have come from a transactional background. For example, our Head of Corporate Development used to run Bank of America's mining group. Our CFO used to run UBS's mining group. We have a transactional bent to the management team.
Within our board, we also have, like myself and Alan Hair, who's on our board, Samuel Mah, who's our VP of Evaluations, who come from an operational mine development background. It's a good complement of skills, which means we can grow through M&A when we have the currency to do so. We did that in 2021. We can do royalty financing as we did with Bomboré back in late 2023. We can do third-party royalty acquisitions as we did with Cozamin and Côté, where we bought royalties from parties that were looking to monetize those royalties that pre-existed. Then we generate royalties organically. We have a gentleman in Quebec and another one in Nevada who have long-tenured prospecting business and experience.
What they do is Stake Expiration claims around existing mines and deposits, farm out the properties to the operators when they need them, and then take back a royalty in return and option payments on those properties. That has become a self-perpetuating business that generates two to three new royalties per quarter, admittedly relatively early-stage royalties. Frankly, the market does not pay anything for those. We are happy to generate those through our sweat equity and continue to grow on a very accretive basis without having to expend scarce capital on acquiring early-stage royalties. You will never see us buy a royalty in an early-stage pre-resource junior. It just does not make a lot of sense for us because we can generate those royalties for free with the skill set that we have embedded within the organization.
We continue to grow, but continue to grow without expending scarce capital or issuing additional stock and continue to populate the pipeline at the early stage while we're waiting to harvest the returns on the significant capital we've invested in some of these later-stage near-cash flowing and cash flowing opportunities that we've added into the portfolio since our IPO back in March of 2021. Okay, Jackie. This just gives you an overview of our portfolio from a number of perspectives. You can see very heavy concentration in Nevada, Quebec, and Ontario, where over 80% of our portfolio, both in terms of number and value, are concentrated in three of the five best jurisdictions in the world, as judged by the Fraser Institute, which I'll talk about in a minute. Very heavy concentration in gold.
It's not to say that we wouldn't look at other metals, but it would be in a precious metal setting, polymetallic precious metal setting. Quite often, when we have royalties, they're over the entire polymetallic deposit, not just on a specific metal within that polymetallic deposit. That's how royalties generally work. We only have one stream within the portfolio. All of our other assets are royalties, so they're over all the metals at a particular deposit. We have, we believe, particular expertise in gold-bearing BMSs and copper-gold porphyries, if you look at our management board and what we built when we were operators and mine developers. If we get some of those LME metals within that kind of polymetallic setting, we're happy to diversify in a very natural way. We're not going to try to force diversification.
You can see we have a very heavy concentration at over 90% gold within the portfolio. A little bit more copper exposure in the short term. We're probably more like 75%-25% gold-copper in the next three to five years as Vareš and Cozamin represent a bigger component of our revenue. Most of our growth is coming from gold, in particular when you look out later from Ren, which is the underground extension of Goldstrike operated by Barrick and Newmont, and also Odyssey, which is the underground extension of Canadian Malartic. That represents quite a significant leg of growth later in the decade, and that's pure gold. While we may be skewed a little bit more towards copper in the short term, we're very much gold-focused in the longer term.
As you can also see, a very heavy majority of our portfolio is now cash flowing or near-cash flowing, developing, as they say. We are very much starting to harvest that pronounced growth rate that I'll talk about in a little bit more detail a little later in the presentation. This is just another way to look at the quality of our portfolio, both from a geological, geopolitical, and also regulatory standpoint. The Fraser Institute in Canada does an annual survey of jurisdictions globally for mining based on mineral potential, political risk, and regulatory risk. You can see we are only second to Osisko Royalties in terms of the quality of portfolio as judged by those three particular criteria. Fraser Institute is, again, an independent economic think tank operated out of British Columbia that does this survey on an annual basis.
We are in what's perennially rated three of the five best jurisdictions of the world, Nevada, Quebec, and Ontario, by the Fraser Institute by those very stringent criteria. What this provides you is a bit of an overview of the landscape within the royalty sector. It's not an exhaustive list of royalty companies. There are a number that are missing, but these are meant to demonstrate consensus multiples, price-net asset value multiples. The reason we don't have all the royalty companies within the sector, particularly the smaller-cap players, is because a number of them don't have research coverage. This is based on published research coverage within the sector. I think what the message that comes out of this graph is that scale matters. You can see three distinct categories of royalty and streaming companies.
At the extreme right, you have the mega-cap companies, the category killers, if you will, Wheaton, Franco, and Royal Gold that are $10 billion-$30 billion plus market cap. They're getting the kind of multiple that comes with that kind of scale, diversity. They also have an exceptional track record of the oldest players in the space, Franco and Royal in particular. Yeah. It continues to grow both.
Some of them have 50-year base metal deposits. What the market is paying for is the life of Salobo or whatever big deposits they're in.
That's right. You're much more diversified. As you can imagine, when you're that large, it's very difficult to find new gold deposits to invest in to continue to perpetuate your business, at least ones that are of sufficient scale to move the needle. They're almost non-existent.
That's because the producer universe has been shrinking for well over a dozen years because of the lack of access to capital for the juniors that conduct all the grassroots exploration in our sector. We've seen a steady decline in reserves in the gold sector. We've seen these companies, in particular Wheaton and Franco, start to diversify away from gold, but still getting a gold multiple and also a multiple that implies they have significant growth. I think the reason that is is because there isn't an alternative in the mid-cap space. In our view, a mid-cap company is something in the $5 billion-$10 billion market cap range, which is a bit of a Goldilocks zone, and that's big enough to be institutionally relevant in a global equity context, but still small enough to grow.
As good as Osisko, Triple Flag, and Sandstorm are, they're not quite at that scale yet. I can tell you that all their CEOs recognize the imperative of achieving that scale because then they can start to close the gap between the three mid-cap players here. Even though they're getting premium multiples to NAV, they're still discounted quite significantly relative to the large-cap players in the space. If general equity investors, global equity investors have an alternative to the three big guys that have sufficient liquidity for them to buy and sell, I think there's the possibility that mid-cap player, which doesn't exist right now, could get a multiple superior to the seniors. We've certainly seen that play out in the producer universe 30 years ago when I was at Agnico Eagle and just starting as CFO and Sean had just taken over as CEO.
Agnico was only a 90,000 ounce a year producer, $200 million market cap. There was no mid-cap in the producer universe. There was just Barrick, Newmont, and a collection of small-cap players and small producers. Through years of effort and mine building, Agnico did capture that mid-cap size at scale at about a million ounces a year, a 15% embedded growth. They had a multiple of three times P/NAV by 2010 that was far superior to what Barrick and Newmont were getting, even though they were multiples the size of Agnico at the time. Agnico, of course, has taken that currency and continued to grow and do M&A. Now they are eclipsing Barrick and Newmont in size.
Really, capturing that mid-tier is a significant value proposition in terms of the potential to achieve a re-rate if you can provide, as I said, both liquidity and growth. These big guys do provide liquidity, but they do not necessarily provide growth. The other value proposition of consolidation is the complete elimination of G&A costs. We absorbed three companies in 2021, excuse me, and we eliminated $10 million of annual G&A costs because at the end of the day, our business is about rolling a filing cabinet from one office to another. We have enough people to run a business 10 times the size. We do not need to scale up the number of people we have in the organization to run a much bigger royalty company. Franco-Nevada, Wheaton, and Royal Gold have demonstrated that, the scalability of our business.
If you look at these smaller-cap players collectively, we guess there's probably about $50 million-$75 million of excess G&A that could just simply be eliminated on an annual basis by seeing consolidation occur among these smaller-cap players. Again, dual value proposition, one creating scale to get the re-rate and get the liquidity to help accelerate that re-rate, but also the significant elimination of annual cost drag embedded in having all of these smaller-cap players in the business. Okay, Jackie. Thank you. This just gives you an overview of the pipeline. Again, seven cash flowing royalties on the extreme right within the portfolio, 14 in various stages of development. The ones that are in yellow that are advanced exploration have 43-101 resources on them. Everything in green is in the pre-resource stage. There are over 180 of those within the portfolio.
The vast majority of our portfolio is early stage. What I would say is virtually all of those green ones, those pre-resource ones, we did not buy. They were generated organically through our sweat equity, through our royalty generator model. While we appreciate that probably 80% of consensus net asset value is focused on the right side of this pipeline and we get very little other than nominal option value on these earlier stage opportunities, it is important to emphasize we are not buying those earlier stage opportunities. We are creating them through our sweat equity. That means the potential for rate of return on those early stage opportunities is infinite. I can give you a very tangible example of that. In 2021, Jerry Bofman, who runs our U.S. business, staked Tonopah West, which you can see in the bottom of the yellow section of this pipeline.
We sold it to Blackrock Silver early last year for about $1.5 million in cash and a royalty on the property. Now, Tonopah West was staked in 2021. Blackrock Silver believes they can get it into production by 2027. I cannot pretend that all of those staking opportunities and generation opportunities that we create organically will have that kind of accelerated timeline to production, but it does speak to the return power of this generator model when you do hit. Even if you hit on one out of 20, the rate of return potential is immense embedded within this portfolio, even though the market ascribes very little value to it. The other element of this is none of these royalties have holding costs. Every royalty and stream we own, and we only have the one stream, is completely bought and paid for.
We have no installment payments. We have no capital costs. We have unmitigated leverage to the gold price, and we have leverage to the exploration of our over 80 operating partners. They conduct over $200 million per annum on exploration on average. Jackie knows I'm jumping around. That has equated to a little over 350,000 meters of drilling in the past year. In some years, it's been over 600,000 meters of drilling.
Do you think this slide about the current year with the gold price at $3,350 or so, why would exploration dollars this year be lower than any of the last four years?
I would say a heavy component of this exploration is brownfield in nature. There's a lot of royalties in the earlier stage that are not getting drilled aggressively because juniors simply do not have access to capital.
A lot of those earlier stage royalties are sitting within small-cap operators' hands or small-cap junior explorers' hands. There was a, in 2021 and 2022, there was a brief window opening for juniors to raise a bit of capital. We saw an immediate acceleration in exploration in those years. As we saw that window shut, we saw a bit of a deceleration. It has really been concentrated in brownfield exploration within the larger-cap players within our operating partnerships.
If you could jump back to the prior slide about the different projects, this is really a fun slide. Four of your projects you're focusing on are pre-production companies in Nevada: Fortitude Gold, Blackrock Silver, i-80 Gold, and Orla. Orla is probably big enough to finance and produce something. Are you comfortable that County Line, Tonopah West, Granite Creek, and South Railroad can get permitted in a couple of years? Sometimes it takes six years in Nevada if you have to do the NEPA process.
I'll give Jackie a chance to jump in here. Go ahead, Jackie.
Sure. Thanks. Granite Creek Underground is already permitted. That one is i-80's highest priority and will be in production or in full production ahead of the open pit. That one, permitting is a lower risk on. I mean, it's a brownfield site anyway, so the open pit shouldn't be as difficult. Certainly, the underground is what's in production now. County Line, that's a satellite deposit for Isabella Pearl. Again, it's more or less a satellite pit for the existing operation that Fortitude's already mining.
It does, I think, generally make things a bit easier when the operator has a track record, particularly local. South Railroad, as you said, Orla is probably in the best position to finance of any of the assets that you mentioned, particularly after Orla acquired the Musselwhite mine from Newmont. It's got cash flowing assets, so it's in good shape to finance the development of South Railroad. It does need permits, definitely. They are expecting to receive those permits relatively soon and get that asset into production as early as 2027. Very optimistic timeline there. I think if there was a NEPA process, the company would have an extended timeline in terms of guidance there. I don't believe that that's going to be relevant for South Railroad. All reports from the company so far indicate that that's moving forward on schedule.
Yeah, overall, we're fairly comfortable. I think the policies.
Are these four Nevada projects in your 2029 revenue forecast?
Granite Creek, South Railroad are in our 2029 revenue forecast.
But not Tonopah West and County Line.
That's correct. Yeah.
How about Jerritt Canyon? Is that a restart of Jerritt Canyon in your 2029?
Jerritt Canyon, we have not put that in our forecast at all. We've written it down, in fact. So it's not in our valuations at all either.
First Majestic idled it when the gold price was about $1,500 lower.
Yep. Correct. We heard comments from First Majestic at the European Gold Forum back in April. They're saying at that point, when they idled it, to your point, gold was $1,500. Their all-in sustaining costs were about $1,800 or more. They think they can get the all-in sustaining costs down slightly with some optimizations at site. Of course, gold prices are well above that now. They are looking to restart Jerritt Canyon. It'll take time. I think the guidance they gave in April was sort of in the one to two-year timeframe.
Fenelon is a 4-5 million ounce resource. The company owner is moving a little slow. Do you have that in your forecast?
It's not in our 2029 forecast, no.
How about Marigold is in production. Do you have a satellite of Marigold?
Yeah. I think with Marigold, if I remember correctly, Dave, correct me if I'm wrong, but I think that one has to produce to a certain threshold before we get paid on that one. The same with Bald Mountain. It's a fairly high threshold. Yeah.
It's out of the current mine plan. It's not included in their current mine plan. Not included in our forecast at all, John.
Is Midway a satellite of Calibre that's selling out to Equinox, or?
Yeah.
It's not a part of it that's in production. Alamos just sold Quartz Mountain to a junior. That maybe has a little more focus now. Some of the things you're not counting have a chance.
Yeah. That's right. The other element is in terms of, back to your point of ownership changing hands, another one I should highlight is Borden, which is a satellite deposit to the Porcupine Complex, which ironically, John, we built when I was running Goldcorp. Just by happenstance, we ended up with a royalty on it.
I'm taking clients there Thursday next week.
Great.
Yeah. Yeah. It's interesting because Discovery Silver has now taken it over, and Tony's overcapitalized, anticipating one that he wants to optimize operations, but also conduct much more aggressive exploration on Porcupine and Borden as well, specifically to deliver some growth within those assets that he just bought, reinvigorate really long-standing assets. Borden is a relatively young satellite deposit coming into operation about five years ago. We're encouraged by the fact that Tony is devoting a lot more exploration to it. In fact, at our Capital Markets Day this week, we will have a representative from Discovery Silver coming to talk about Borden specifically.
Which other operators are coming to your program Thursday?
U.S. Gold Mining is coming to speak about Whistler. We've got Discovery Silver, as Dave mentioned. We've got Walbridge coming to talk about Fenelon. We've got Agnico Eagle coming to talk about Canadian Malartic and Odyssey.
Very good. Very good. Excuse me for interrupting. I can look at this slide for hours because there are all these different interesting deposits.
I should mention we also just published an updated asset handbook and sustainability report. We call it the Integrated report with those two together. That came out on Monday. If you want to dig into any of the assets in more detail or anybody in the audience, you can find that on our website. It's fresh off the printers.
Good. Jackie, you might want to continue here. I think we get into the cash flow and revenue forecasts, and I think that's really in your belly with. Go ahead.
Sure. Thanks. This slide really speaks to what John was just asking about, really.
I mean, our 2025 guidance we show on here is 5,700-7,000 GEOs. That we put out in March with our Q4 results. The midpoint of that guidance is about a 16% growth over the 2024 actual result. Most importantly, most exciting would be our 2029 guidance. We have 23,000-28,000 GEOs from 2024 to 2029. In just a short five years, we are expecting 367% growth. Most of that growth, 80%-85% of that growth, comes from mature operations or what we are calling here brownfield expansion. Borden, Côté, Cozamin, Bomboré, Odyssey, Ren, and Vareš. Those are all projects, assets that are built. Most of those are operating with the exception of Ren, which is the extension of Goldstrike, as Dave mentioned. Very low risk from a development, execution, construction perspective.
They do, in some cases like Bomboré, Côté, Vareš need to be fully ramped up to full run rate, but they are built and operating. The other, call it 15% of that guidance is represented by what we're calling advanced development. South Railroad, County Line, Granite Creek. We talked about these a little bit already. South Railroad is operated by Orla. It does require permits and construction. Orla is targeting to have that in production in 2027. Granite Creek, the underground is already operating. That one's owned and operated by i-80 Gold. Of course, it hasn't paid us yet. That's an NPI royalty that we have. It does need to ramp up to full production and then recoup the capital that's been put in by i-80 before we get paid. That is undergoing a de-risking process right now.
IED is capitalizing the mine, redoing exploration drilling, definition drilling, the feasibility study, and ramping that back up to full production. Granite Creek is not requiring any permits for the underground, not requiring any major construction, but we've got it in advanced development because it's not paying us today. County Line is a satellite pit. It is the extension of the Isabella Pearl Line that Fortitude Gold is operating. Again, it's a little bit higher risk, but it's part of a brownfields complex. We don't view that as super high risk also. In the guidance, in the 367% growth we've got in five years, there are very few what we call risky projects from a construction and execution perspective. All of these projects essentially are in low-risk jurisdictions.
As David mentioned before, they've all been fully bought and paid for by us. We do not have any capital calls or capital outlays to receive this growth. Just putting that growth in context, we have tried to benchmark against some of our peers. This is against other royalty streaming companies and guidance that they put out also earlier this year, same timeframe as us. In 2025, like I said, we have 16% growth year- over- year from 2024 at the midpoint of our guidance range. That is about fourth in the pecking order of similar royalty streaming companies. I mentioned there are a number of companies that are actually no growth or negative growth this year versus last year. This is on their own guidance. This is on their own definition of GEO. It is a good growth rate between last year and this year for us.
We're very happy with that. More importantly, in 2029, our 367% growth rate is significantly higher than the peers that put out long-term guidance. Not everybody puts out long-term guidance, and some companies use different years. Essentially, on comparable guidance, we are by far the highest growth rate of other royalty streaming companies. Again, some of the larger royalty streaming companies will be very low growth even over that five-year horizon. I think we lost John.
I just turned off my camera because either you froze or my internet faded. I use less bandwidth without my camera.
Okay. No, I'm glad you're still with us. Okay. The next slide, we just want to show a similar, but on a slightly different basis. Here we're showing this on a gold equivalent ounce consensus average estimate. We've got five analysts covering us.
The gold bars at the bottom here are the median of the consensus expectations for our production on a GEO basis. You can see similar trajectory. I would point out that in 2029, the consensus is still below our guidance range. We do see upside in 2029 versus where the street's currently expecting our production will be. I think it's important to note that this isn't a major step change between 2028 and 2029. We actually expect steady growth, or consensus is expecting steady growth year- over- year. 2025 was better than 2024. 2026 will be better than 2025 as Bomboré, Vareš, Côté continue to ramp up. In 2027, we see Ren starting production, South Railroad starting production. We see Vareš and Bomboré potentially having expansions. There is significant growth and significant catalysts in the next couple of years.
In 2028, potentially we see Agnico Eagle, Odyssey Shaft being finished and higher production through the Shaft. Again, a significant step up in 2028 before we get into the end of the decade. It is not just one asset. It is not just one location, but we see significant steady growth every year over the next five or so years. What we are showing in the line charts above this bar is different gold prices. We have basically just taken the consensus average volume forecast on a GEO basis. We have multiplied it by different gold prices. You can see around current spot gold prices, our revenues go from about $13 million in 2024 to $50 million or $80 million by the end of the decade at roughly spot gold prices. That translates directly to free cash flow to us.
We do expect our recurring G&A costs will stay fairly flat at about $7 million or $8 million per year. As we pay our debt down, as we generate cash and pay our debt down, our interest charges will actually decrease. We were operating cash flow positive in 2024 for the first time. We will be free cash flow positive in 2025, meaning we will also cover our interest costs through our revenues. That continues to grow as exponentially as revenue and potentially even more dramatically than revenue if we pay that interest down over the next few years. Very exciting time. We are at a real inflection point between 2024-2025 as we see that free cash flow generate positively and grow pretty significantly from here. I mentioned already some of the catalysts.
I'm not going to go through this in a lot of detail, but we show this slide just to show that there are a lot of potential positive news flow items, potential positive catalysts in our portfolio over the next few years. This year is really about execution, Bomboré, Côté, Vareš. We have optimizations at Borden. We have the second shaft at Odyssey, which would potentially be another major catalyst for us. As Agnico talks more about that next year, that could unlock some more value for us. We have some other studies, Tonopah West, South Railroad. We have the expansions at Vareš, Bomboré. We have the first shaft being completed at Odyssey, the initial production at Ren, initial production at South Railroad, and then Tonopah West, as David mentioned, starting construction in a few years. Very exciting time for us.
As companies continue to develop these assets and other assets that are earlier in the pipeline, we'll continue to add more catalysts to our list. Got more asset detail if we want to go through that. I can talk a little bit more about Vareš, I guess, to start. Vareš, as David mentioned, we have a copper stream on 100% of the copper. Copper is a small byproduct for Vareš. It's essentially a silver mine with lead and zinc as well. When it's fully ramped up, it is expected to be one of the top 10 silver mines in the world on a silver equivalent basis. You may have seen some news out recently. Adriatic Metals, the operator, has been approached by Dundee Precious Metals about potentially an acquisition. That is still to be determined.
It just really shows the quality of the asset and how other operators are paying attention to this terrific mine. It recently started first production last year, and it's still ramping up to commercial production. It does expect to hit commercial production in the second quarter, so over the next couple of weeks. Its run rate right now will be about 800,000 tons per year. It's expected to hit that full run rate in the second half of this year. There are two phases to growth. There's the first phase to get to 1 million tons per year. They say minimal cost to that is about $1 million or less that they would need to invest to get to that 1 million tons per year level. They expect to hit that in 2026. Then another expansion to 1.3 million tons per year.
That would be about $25 million U.S. investment. And that's expected to be reached in 2027. Adriatic did raise AUD 80 million or $50 million US in February. So that should be well financed to cover not only those expansions but also working capital in the near term as well. They had, as most mines do, sort of a challenging start. They had some issues with weather, for example, tailings facility. But they have very recently put out some very good news. They made significant progress in April. Their production, both on a volume throughput milled and on a silver equivalent production, have been at records in April. And so they are very positively looking forward to continuing that trajectory later this year. Côté Gold, IAMGOLD's the operator there. I think that's a very well-known mine.
As David said, it's one of the biggest mines in North America, one of the biggest gold mines in North America. That started production a little while ago, a couple of years ago, and hit commercial production last year already. It's on track to reach its steady state nameplate by the end of this year. Things are going very, very well at Côté. They have talked about expansion. Right now, it's a 36,000 tons per day operation. They could expand that with the installation of a Vertimill to about 42,000 tons per day. The mine capacity is about 50,000 tons per day. They are also looking for other optimization opportunities to match mining and milling capacity. That would be positive for us, of course, if the expansion was completed early. Our royalty doesn't fully cover the entire Côté mine operation.
It's on one zone. It's called Zone 5 of Côté. It's the southern portion of the pit. It's also the portion that they're mining fairly early in the mine life. We're getting about 40% of production coming from that Zone 5 right now. We're expecting it will be depleted in about the first six years of mine life. It is a high-priority near-term cash flow for us and high-priority for IAMGOLD as well. The last one on this list of key assets is Bomboré. Bomboré is operated by Orezone. We have a 2% NSR on Bomboré. This mine started production in late March of this year on schedule, on budget. It is expected to hit commercial production in Q3. Right now, the ore bodies are bisected by a highway that goes through the asset.
Once they relocate the highway, which they're permitting right now, they'll be able to expand the reserve. When they expand the reserve, they will also look to expand the throughput of that operation. Right now, it's about 2 million tons per year operation. They're talking, I think we've heard them say 3-3.5, 4 million tons per year for the fully expanded operation. That would be a significant upside for us as well. The highway relocation is expected sometime in Q2 or Q3 from a permit perspective. They would do the work concurrently, relocating the highway and expanding the mill at the same time. I've got some other assets here, John. I think I'm not sure if we want to go through them all in detail. I'm happy to talk through more of them or David.
I think we've mentioned almost all of them already.
Yep. You can go to the next one. Do you want to?
Yeah. Maybe I'll pick it up from here. The message of this slide is the very high correlation between the gold price and unit all-in sustaining costs in the producer universe. I mentioned earlier on, the difficulty producers are facing right now is a lack of reserve growth because the juniors have not had any consistent access to capital for well over a decade. There hasn't been a lot of discoveries occurring. As a result, we've seen a steady depletion of reserves. They're down 40% from their peak in 2012. That is one phenomenon that producers are dealing with, which probably explains why valuations are depressed relative to where the gold price is.
They really haven't caught the bid you would have expected to catch at these record gold prices. The other phenomenon that they experience is cost inflation. Certainly, they weren't immune from the inflation we experienced in the general economy that was, I guess, catalyzed by COVID, but really happened because of years of monetary expansion that ultimately had to lead to inflation. Money supplies increased really exponentially since the Great Financial Crisis. That had to come to roost in terms of inflation. More recently, their margins have expanded. The gold price has really accelerated this year. The gold price is up, I think, over $700 an ounce, around $700 an ounce. You have seen actually margins expand at the mine site level.
Inevitably, what happens when you're running a mine is when you get to the mine phase, you're not using your long-term reserve pricing to figure out how much of that material you're going to put through the mill. You're going to be using something closer to spot prices. Inevitably, what will happen is grades will be diluted by lower-grade material, which is going to be making money at these gold prices. That will result in all-in sustaining unit costs going up, even though we've seen labor costs and energy costs really not inflate to the extent they were a couple of years ago. That's why you've always seen a bit of a catch-up between all-in sustaining costs and the gold price. We've seen this separation before, but it's generally a short-term phenomenon.
We go back to a very high correlation of all-in sustaining costs to the gold price. In fact, the R-squared is around 98% over this 30-year period. It is a very, very high correlation. Really, those are the factors behind it. Understandably, investors are saying, "Maybe there isn't the leverage in the producer universe as we thought there was." That has been the trade over the last dozen years or so. We have not seen a reinflation of the valuations of the multiples we saw coming out of the Great Financial Crisis when all metal prices were really roaring. We saw really, really good multiples. That has not recurred at this point of the cycle. I think it is, again, that twin phenomenon of declining reserves and all-in sustaining costs that are quite sticky. We talked about this slide earlier on.
I'll skip on to our share ownership, Jackie, and talk a little bit about our shareholder base. That's a bit of a story because when we IPO'd back in March of 2021, that was largely a retail-driven IPO, very little institutional participation. We have strategics and insiders that own about 30%. That includes our former parent company, Gold Mining Inc. The other 70% of our shareholder base floats, but it's largely retail or has been until recently. One of the reasons we created the role for Jackie when we brought her in as an Excel site analyst at FEMA is we really wanted to start to focus on diversifying the shareholder base, bringing in that marginal investor on the institutional side. It's largely not participated in the story because they didn't see this as a self-sustaining business.
They were waiting for us to get to that free cash flow part of our life cycle. Now we are. And not only do we have free cash flow this year, but pronounced growth in free cash flow at virtually any gold price going forward over the next five years as a result of a significant increase in volume from some of these large-scale mines that we have within our portfolio. The next slide just gives you an overview of our research coverage. We have five analysts that currently cover us. There is one other self-sustaining analyst very closely launching coverage. Stay tuned. It's with a dealer that all of you will be very familiar with. He's in the final strokes of getting his research piece published. As you can see, very healthy volume for a company of our size. We're trading close to 2 million shares a day.
It's relatively liquid. Again, it's because we had such a well-diversified and well-embraced IPO back in March of 2021 in the retail universe of the U.S. We're listed just on the NYSE American under the trading symbol GROY. The only debt we have outstanding is effectively our line of credit with Bank of Montreal and National Bank Financial. That's been an evergreen three-year secured facility. We've drawn about a third of it. Our priority this year is to take that free cash that we expect to generate and start to pay down that, what I call, credit card debt. We use it to acquire some really important assets like Vareš and most recently Garrison. We'd like to pay that back and maintain that availability when our currency is healthy and we can start to populate the pipeline again.
Later stage acquisitions, we'd like to be able to use debt as opposed to equity and then really repay that debt out of free cash flow. The convertible debentures are actually in the money. They were five-year unsecured pieces of paper, mature in November of 2028, recallable by us in November of 2026. In about a year and a quarter from now, we can actually force conversion and really basically eliminate all of our debt by the end of next year. John, with that, I think that kind of covers the story. Again, peer-leading growth in revenue, peer-leading growth in free cash flow over the course of the next number of years. We've built out, I think, an enviable portfolio of some significant cornerstone foundational generational assets, including Côté, Canadian Malartic, and the underground extension of Goldstrike.
We have complemented that with assets like Vareš that have 18 years of reserve life. They are getting scaled for Bomboré that has at least a dozen years of reserve life that is also being scaled up through an expansion as well over the next couple of years. All of that expansion really comes free to our shareholders. Unmitigated leverage of the gold price, leverage to exploration, and the expansion that our operating partners are looking to undertake as they look to optimize the assets that they have built out.
David, in the four-fold revenue growth in four years, 2029 over 2025, what is the single largest component of the growth?
Jackie, you go ahead. You can answer that.
Yeah. I think Canadian Malartic or Odyssey would be the single biggest contributor to that growth. That asset is about 30% of our NAV alone. As that shaft gets sunk, as the production from underground expands, we're expecting more and more of that production will come from areas of our royalty coverage. That's definitely the biggest. There's a lot of other ones that are quite exciting in there too, like Ren, but Odyssey would definitely be the biggest.
David, in 1986, I was at a firm that paid semi-annual bonuses. There was an account receivable from a government securities trading firm that went bad and there was no profit. Management said they were going to cut the research bonus full 40%. I said, "I'll just take a six-month sabbatical." It turned out the drug analyst quit and went to PaineWebber, and they only cut us back 15%. I took a three-month working sabbatical.
I went from Tucson to Alaska to Black Hills of South Dakota and visited national parks and mineral properties, Camp Taff at the time. When I wanted to have a free dinner, I visited a mine manager. I sent in handwritten research reports, and they published them. That summer, the gold stocks doubled. I went back to the office in September, and the brokers were shaking my hands and thanking me for coming back. I'm thinking how you've got everything laid out for revenue to go up four-fold without doing anything more. Some of the shareholders might be worried that you're going to try to do something more and do financings, and the stock market did not like it when you sold stock for Barry's.
My question, and I was kidding you about this before we started, I do not know if you like skiing or fishing or hiking or beaches, but where would you go if you took a two-year sabbatical? How good of an idea do you think it is? Would you make all the officers take a sabbatical too? Maybe if you want, just give them half pay and cut a little bit of G&A.
Yeah. No, it is an excellent question. If you look at the pace of growth, it was very aggressive at the early stage of our life cycle when we had the currency to do so. We were at a very rich valuation in 2021, coming out of the IPO, recognized it as such, and aggressively grew and diversified the portfolio. Since then, the pace of acquisition has slowed dramatically.
The last major deal we've done was a year ago, actually a year, 13 months ago, which was the Vareš acquisition. We haven't issued a lot of equity. If you look at our track record, we did an equity raise in our IPO. More than three years later, we did an equity raise for Vareš. In our four-and-a-half-year existence, we've gone to the market exactly twice. In the case of the IPO, it was to populate the treasury so that we could diversify the portfolio. In the case of the Vareš acquisition, it was to acquire a generational asset that will represent one of the 10 biggest silver producers in the world with 18 years of reserve life, with no brownfield exploration done to this point because the operator has been singularly focused on construction. We bought a generational asset there.
Yes, the market definitely punished us. I think that's a function of the fact that Adriatic had virtually no research coverage in North America. There was a complete lack of familiarity of the asset. Over time, that asset has demonstrated to be a very, very high-quality asset. Now we've seen interest from other large-scale operators that want to take it over. We're not surprised because top 10 silver producers in the world are completely scarce in a very robust silver environment right now. I'm not surprised that it's going to end up probably in larger hands. That's good news for us because it's a well-capitalized operator. It's likely to spend more money on exploration, more money on expansions. That comes free to us. We get that optionality for free. You're right. We haven't been able to buy anything in the last years.
Not to say we haven't looked. We've been priced out of everything because our equity is too expensive right now. There's just no way for us to participate in this market. We always look. We're in a perpetual state of due diligence, but we're not in a perpetual state of execution. To put that in hard numbers, we've looked at over 400 opportunities since our IPO. We put offers in on 40. We've executed on 10. We have to look at a lot of things to get to the narrow end of the funnel where we can actually buy something. On the ones that we've executed, we have to have the currency to demonstrate that we actually can do something accretive. We don't have the currency right now. We continue to look because that's what we should be doing.
Because if the currency comes back and we think there's something accretive out there that we can—
So how about golf if you don't like skiing or beaches?
I don't like golf either. So I'm 35 years of—I like money.
Don't even bother to look. Read the Bible or get religion or something.
We've been keeping pretty busy telling the good story to as many people as possible.
Jackie's run off my feet. My travel schedule is more populated than it ever has been, but it's really just telling the story and telling institutional investors about the quality of this portfolio we've assembled.
Quite often, the refrain as we go into these meetings with institutions that Jackie knows really well because she was a sell-side research analyst is like, "I never heard of this company before." That is the reason we brought Jackie in, as we needed some profile with those institutions. This was a way to get those meetings and start to get a bit more diversity in our share ownership. That has paid some dividends this year. Our stock is up about 60%. I think we are still discounted heavily to our NAV, but we are starting to close the gap a little bit.
Thank you for the update and all the progress. I am just rooting for you to fly fish or hike or discover nature. You do not even need to do anything for a couple of years. A whole bunch of you. The money you would save evaluating projects.
The good news is we have other really compelling uses of our capital right now, paying down the debt, maybe paying some back to the shareholders in a dividend or a buyback at some point in the future. Yeah, sure. If we get cash in the door through this revenue growth that we're expecting, it does not have to be spent on new growth if that is not the smart way to do it. We have other obvious uses of that capital too.
Super. Good luck. Thank you. Sorry if I kidded you too much.
No, not at all.
It is not golf. Okay. Take care.
No, I will take up Greek cookie, and I will come down and visit you.
Get easy. Bye-bye.