The royalty sector just got a seismic jolt. In a major industry development, EMX Royalty Corporation (NYSE:EMX) has confirmed it is the target of an acquisition interest from Elemental Altus Royalties (OTCQX:ELEMF). Announced during a detailed investor webinar moderated by Mining Stock Daily's Trevor Hall, both CEOs — Dave Cole of EMX and Fred Bell of Elemental Altus — walked through their vision for a combined entity that could potentially reshape the competitive landscape of the junior and mid-tier royalty market. While the companies stopped short of confirming a binding deal, they left no ambiguity about the strategic rationale behind the interest. So what is it that make EMX a compelling acquisition target for Elemental? Let us find out!
Strategic Scale & Revenue Synergies
One of the most prominent factors driving Elemental’s interest in acquiring EMX is the opportunity to immediately scale into a new valuation tier in the royalty sector. Together, the two companies would form a ~$1 billion market cap entity with projected annual revenue in the $70–80 million range, making it one of the highest revenue-generating royalty companies in the junior-to-mid tier space. The merger not only broadens geographic and commodity exposure but also deepens access to key cornerstone assets such as Caserones, Timok, Laverton, and Leeville. From a scale perspective, this creates operational efficiencies, opens doors to institutional investors seeking exposure to larger royalty names, and lays the groundwork for potential inclusion in key index funds — a point Elemental’s CEO Fred Bell emphasized. EMX brings a high-quality revenue base with about 45% of net asset value in producing assets and 55% in development or exploration, providing near-term cash flow as well as long-term growth optionality. Additionally, the combined company is expected to benefit from meaningful G&A synergies. EMX and Elemental each face duplicative corporate costs from separate listings, reporting, and compliance obligations. By merging, they anticipate “multimillion-dollar” cost savings annually through consolidation of finance, legal, investor relations, and other back-office functions. The scale also positions the pro forma company to expand its credit facility, currently expected to grow to at least $150 million, giving it the firepower to pursue larger royalty opportunities without relying on syndication. This is a critical evolution from past transactions that required external partnerships to close. For Elemental, the EMX deal offers both immediate margin expansion and a significant uplift in trading multiples over time — a pathway to transition from the junior ranks to a mid-tier royalty leader.
Deep Optionality Through Discovery-Linked Assets
Another key attraction of EMX is its robust exposure to discovery and development upside — what the team repeatedly refers to as “embedded optionality.” With over 130 royalties in EMX’s portfolio, many covering large land packages in Tier 1 jurisdictions, the combined company would control a wealth of assets where operator-funded exploration and drilling can trigger re-ratings without additional capital from the royalty holder. This is particularly evident in cornerstone EMX royalties like Timok, where Zijin Mining is aggressively drilling 12 rigs across both the upper and lower zones, including the massive MG discovery — a maiden resource of 180 million tonnes at over 2% copper equivalent. Similarly, the Caserones royalty, syndicated between both companies, has turned into a cash-generating engine, with operator Lundin Mining increasing throughput and making new high-grade discoveries such as Angelica. EMX also holds substantial interest in Diablillos and Cactus, both of which are experiencing material resource growth, adding further depth to its long-term NAV. From Elemental’s perspective, this pipeline of growth-stage assets represents an untapped growth lever. The prospect of re-rating pre-production royalties into cash-flowing assets over time, without spending capital, aligns well with Elemental’s acquisition-driven strategy. Furthermore, Elemental's recent Laverton royalty acquisition — which doubled its exposure to a 4Moz deposit with little historical exploration due to ownership constraints — complements EMX’s discovery-rich model. The pairing creates a structurally advantaged royalty company that can thrive on both near-term revenue and longer-term revaluation events. This optionality is difficult to replicate and is a key reason Elemental views EMX as a uniquely synergistic target.
Prospect Generation Engine & Technical Depth
EMX’s differentiated business model — which combines traditional royalty acquisition with active prospect generation — provides strategic value well beyond its portfolio. The company has built a globally distributed team of geologists and engineers who generate new royalties by acquiring mineral rights, conducting early exploration, and vending properties to partners in exchange for royalties and equity. This model has yielded consistent value creation and enhances EMX’s ability to uncover off-market deals and underexplored opportunities. While Elemental has historically focused more on acquiring existing royalties, it is no stranger to this approach; the Altus merger in 2022 brought in prospect generation capabilities, including the generation of the current producing Sadiola royalty. EMX’s platform significantly expands this effort, especially in key jurisdictions like Scandinavia, the U.S., and Serbia. The technical pedigree within EMX — described by both CEOs as among the best in the industry — also brings qualitative synergies. Elemental’s management has acknowledged that some of its best deals have been through bilateral, proprietary transactions where deep technical understanding provided an edge. The merged entity would combine EMX’s technical infrastructure with Elemental’s strength in capital markets and financial structuring. This fusion could enable more efficient due diligence, better underwriting of royalty acquisitions, and improved execution on generative projects. It also future-proofs the business by maintaining an internal growth engine that doesn’t rely exclusively on external deal flow, which can be competitive and pricey. For Elemental, acquiring EMX is not just about adding royalties — it’s about acquiring an ecosystem that continually creates them, with optionality baked into its DNA.
Financial Flexibility & Backing From Strategic Shareholders
The timing of this acquisition interest is catalyzed by improved financial positioning and the entrance of Tether as a cornerstone shareholder. Since Tether’s investment in Elemental Altus, the company has moved quickly — completing two transactions in two months and initiating the EMX merger discussions. Tether’s endorsement signals stronger balance sheet support, with commitments to fund growth and leverage the royalty model’s capital efficiency. This comes at a time when the combined company is expected to hold approximately $50 million in cash, $10 million in equity investments, and a credit facility that could soon grow to $150 million or more. The access to capital is pivotal for executing larger transactions without diluting shareholders or compromising asset quality. Historically, both EMX and Elemental have syndicated deals like Caserones due to scale constraints; post-merger, the company would have the balance sheet strength to act independently. The improved scale and funding could also reduce the cost of capital, positioning the company more competitively in auctions for high-quality royalties. Additionally, both companies enjoy long-standing support from royalty-focused institutional investors like Extract Capital, Paul Stephens, Adrian Day, Sprott Global, and even Franco-Nevada — the only royalty company Franco has invested in, according to EMX CEO Dave Cole. Franco’s consent was a required condition for the EMX deal, signaling implicit support. All of this financial backing, coupled with dual listing plans (TSX and upcoming U.S. listing), enhances liquidity and investor access. For Elemental, the ability to plug EMX’s infrastructure into this ecosystem creates significant capital allocation optionality. The company can selectively pursue new royalties, buy back shares opportunistically, or even consider dividends — all without compromising its growth profile. This level of financial flexibility and shareholder alignment is rare in the junior royalty space and likely a decisive factor behind Elemental’s pursuit of EMX.
Final Thoughts
Source: Yahoo Finance
EMX Royalty’s stock has had a dream run over the past year and has given phenomenal returns to shareholders. With gold trading at all-time highs and a bullish long-term commodities outlook, the timing of this proposed merger speaks volumes. The combined company would boast over 200 royalties, an increasingly diversified portfolio of producing and pre-production assets, and, importantly, support from heavyweight backers like Tether. However, the deal is not without challenges. EMX’s business model includes a high proportion of early-stage assets and prospect generation operations, which may not align seamlessly with Elemental’s traditional focus on cash-generative royalties. As of early September 2025, EMX trades at elevated LTM valuation multiples: 14.87x EV/Revenue, 41.00x EV/EBITDA, and 93.42x EV/EBIT. Its LTM P/E ratio is 92.67x, signaling a high market premium relative to earnings. While these may be justified by asset quality and growth expectations, they represent a steep entry point. For Elemental, the calculus will be whether long-term accretion and strategic value outweigh short-term valuation concerns. Whether a deal materializes remains to be seen, but the rationale behind Elemental’s interest in EMX is both financially and operationally grounded.
