This is Part One of the Industry Primers audio program on natural resources royalty and streaming, published by Latticework from MOI Global. It is the first of two audio programs that accompany the written primer on royalty and streaming companies, and it is the story of the industry, told for a general audience. The account is built from documented scenes, with the people named, the dates given, and the participants quoted in their own words. It assumes no background in mining, oil or finance and explains its terms, from a net smelter return royalty and a stream to a non-participating royalty and produced water, as they arrive. This episode is public.
The program runs from a railroad land grant put in trust in 1888 to a $4.3 billion purchase of silver in 2026, and from Salt Lake City, Toronto and the gold mines of Nevada to Mexico, Brazil, Panama and the Permian Basin of West Texas. Its people are the builders of the industry’s largest companies: Pierre Lassonde and Seymour Schulich, who founded Franco-Nevada in 1982, and David Harquail, who ran it from 2007 to 2020; Ian Telfer and Randy Smallwood, who created the stream and built Wheaton Precious Metals; and Murray Stahl and Tyler Glover, the investor and the chief executive behind Texas Pacific Land. It follows how each of them paid cash once for a fixed share of mines and wells that other companies paid to find, build and run, and what that share earned.
Part One stands on its own. It tells how the business took its present shape, from the trustees of 1888 and the first gold royalty of 1986 to the first stream of 2004 and the water business of the Permian. The economics of the contracts, and the companies as investments, are the subject of Part Two and of the written primer. The records it gives are total returns with dividends reinvested, each stated with its window and its benchmark.
The program runs in nineteen sections:
Anything Less Than Two Million. In 1986 a geologist working for Franco-Nevada finds a box ad for a royalty on Nevada’s Carlin Trend, and in Salt Lake City Pierre Lassonde learns that the seller owes his bank $2 million with 90 days to pay, so he doubles the $1 million he and Seymour Schulich had agreed the royalty was worth, spending all the money in the company’s treasury.
Shares of One Hundred Dollars Each. In 1887 the bondholders of the bankrupt Texas and Pacific Railway take its Texas land in exchange for their claim, and the declaration of trust of February 1, 1888 lets the trustees pay out rents, land sales and “royalties for coal and minerals”, or spend it retiring certificates of $100 each and canceling them.
That Delaware Position. Oil comes in on the trust’s land in 1920, as the company tells it, and at the state university’s Santa Rita No. 1 in 1923; Certificate No. 390, worth $1,800 in 1888, is worth $1,280,000 by 1952; and in 1954 the trustees spin off the mineral estate but keep a royalty of one-sixteenth under the Delaware Basin.
The Biggest Dummies. Pierre Lassonde, trained in electrical engineering in Montreal, and Seymour Schulich, who ran the oil and gas investments at Beutel Goodman, start Franco-Nevada on the side in 1982 on a handshake, see its Nevada gold prospects “all turned to dust”, and ask whether mining has royalties the way oil and gas do.
The Discovery of Three Lifetimes. Barrick buys the Goldstrike mine under the new royalty for $62 million, its deep drilling finds what Franco-Nevada calls “a 50 million ounce orebody”, and the day before the founders were to sign Franco-Nevada away, Brian Meikle’s verdict on the deposit persuades the founders to build the company instead.
Banker of Last Resort. David Harquail joins Lassonde in 1987, the partners acquire royalties in gold camps from Nevada and Ontario to Kalgoorlie, advance $2 million for a 2 percent royalty on Detour that pays its first check 15 years later, and in 1997, after the Bre-X fraud, Schulich describes Franco-Nevada and its sister company Euro-Nevada, with about $500 million of cash between them, as a banker of last resort to the industry.
A Meeting Set for September Eleventh. A meeting with Newmont set for September 11, 2001 does not take place because of the attacks, on November 14 Newmont agrees to acquire Franco-Nevada for its own shares in a year when gold averaged $271 an ounce, and at the closing in February 2002 Franco-Nevada is valued at close to US$3 billion.
Schmuck Insurance. Inside Newmont the royalty book grows because Newmont keeps a royalty on everything it sells, a habit Harquail calls “our schmuck insurance”; in December 2007 it returns to the market as a new Franco-Nevada at C$15.20 a share and buys the portfolio for about $1.2 billion, and in 2008 its shares rise 17 percent while the gold miners’ fund falls 26 percent.
I Had No Salary. Ian Telfer, a chartered accountant who had sold his house after his dot-com company went broke, becomes chairman and chief executive of Wheaton River on September 28, 2001, with gold at $283 an ounce, and asks Randy Smallwood, an auctioneer’s son turned geological engineer, to stay and “keep me away from the bad mines” before Wheaton River buys Luismin in Mexico in 2002.
A New Company That Owns Nothing. After a failed swap of copper for gold with the operator of Alumbrera, Telfer proposes “a new company that owns nothing”, and on October 15, 2004 Silver Wheaton signs the first stream, paying about US$36.7 million and 108 million shares for Luismin’s silver at the lesser of $3.90 an ounce and the market price.
Over and Over Again. Under Peter Barnes, Silver Wheaton repeats its model “over and over again”, Goldcorp sells its whole stake for C$1,566 million on February 14, 2008, and from April 2006 to April 2011 the shares return 33 percent a year in US dollars, while Nolan Watson and David Awram leave to found Sandstorm.
The Only Ones Who Can Write a Check. Harquail keeps Franco-Nevada’s cash through the boom so that it can be “the only ones that can write a check on the next downturn”, and from August 2011 to December 2015 its shares gain 12 percent while the miners’ fund loses 77 percent; over his tenure as chief executive, to May 2020, they return about 15 times in Canadian dollars, 24.6 percent a year.
For Generations to Come. Randy Smallwood, chief executive from April 2011, pays no more than the long-term price for a metal, buys the gold of Vale’s Salobo copper mine in Brazil in three purchases from 2013 to 2016, and by the end of 2025 Wheaton has received $3,519.8 million in cash against $3,573.4 million paid, on a mine planned to about 2052.
Thirty-Eight Days. In 2023 Panama’s Supreme Court strikes down the law renewing Cobre Panama’s contract 38 days after it passed, and Franco-Nevada writes its stream down to nil, a charge of $1,169.2 million, a loss the company absorbs with hundreds of other assets, no debt and $1.4 billion of cash.
Some People Sold Shares Back Then. Murray Stahl’s Horizon Kinetics becomes the largest outside holder of the Texas Pacific Land Trust, the trustees retire about half the trust’s shares between 1994 and January 2020, and its oil and gas royalties grow from $8.7 million in 2009 to $154.7 million in 2019 on wells it never paid to drill.
Really Water Wells. Tyler Glover, who grew up in Midland and became the trust’s chief executive in November 2016, forms Texas Pacific Water Resources in June 2017, and in 2025 water sales and produced-water royalties make up 36.8 percent of TPL’s revenue of $798.2 million.
Everyone, That Is, Except Murray. A proxy fight in 2019 leads to the trust’s conversion into a corporation, a Delaware court ties its new shares to a stock split, Stahl dies on April 7, 2026, and under Glover TPL returns 13.45 times with dividends reinvested to October 16, 2026, against 4.28 times for the S&P 500.
The Largest Mining Company in the World. On February 16, 2026 Wheaton Precious Metals agrees to pay BHP $4.3 billion for its share of Antamina’s silver without issuing shares, and Randy Smallwood hands over to Haytham Hodaly after 15 years as chief executive that returned 3.59 times, ahead of gold and the gold miners’ fund and behind the S&P 500.
A Checkbook on the Doorstep. Lassonde learns that when the seller of 1986 got back to his office the operator was waiting with his checkbook for the royalty, Goldstrike produces 42.8 million ounces from 1987 to the end of 2016, and from December 3, 2007 to October 16, 2026 Franco-Nevada’s shares grow 19.6 times in US dollars with dividends reinvested.
The program runs 1 hour 30 minutes (1:30:28). The written primer and its companion deck are on the Latticework Substack at the Industry Primer on natural resources royalty and streaming. Part Two, the deep dive for professional investors, is a separate episode, available to members of Latticework: Industry Primers Podcast: Natural Resources Royalty & Streaming, Part Two: The Deep Dive.
This audio program is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; listeners should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.
Transcript
The transcript is available for download to members only.
