Silver Crown Royalties Inc. (SCRI:CBOE; SLCRF:OTCQX; QS0:FSE) announced a nonbrokered private placement for aggregate gross proceeds of up to CA$2 million (CA$2M), reported Couloir Capital in a June 20 note.

A total of 307,692 units will be issued at CA$6.50 or US$4.55 apiece. One full warrant may be exercised at CA$0.13 or US$9.10 during the 36 months after the capital raise closes.

Silver Crown will use the funds to seek out potential acquisitions of cash-generating silver royalties on producing assets, reported the analysts. Other applications will be working capital and corporate development.

Most recently, the company agreed to acquire a 4.5% royalty on silver produced at Kuya Silver Corp.’s (KUYA:CSE: KUYAF:OTCQB) Bethania mine in Huancavelica, Central Peru.

Warrants Higher Valuation

Silver Crown boasts increasing revenues, positive momentum, and strong institutional and corporate support. A CA$32.34 price target is justified on the currently undervalued company, according to Couloir Capital Analyst Tim Wright.

Silver Crown has a tight share structure that provides strong leverage to growth, Couloir reported. As of April 30, Silver Crown has 2.8 million (2.8M) basic shares outstanding, 4.44M fully diluted shares outstanding, 1.58M warrants and 104,797 restricted stock units.

“[The company’s] disciplined capital structure and equity-light royalty acquisition model create an attractive setup for value creation as silver deliveries ramp up,” noted Couloir analysts.

New Standard in Royalty Space

Silver Crown is creating a pure-play silver royalty model, focused wholly on silver byproduct streams. Silver Crown’s royalty agreements are secured on title, include minimum silver delivery obligations and are structured to align with operator success. As such, the Canadian company is setting a new standard in the royalty space.

The company’s royalty deals have built-in downside protection through minimum silver payments and are structured with staged investments to mitigate risk. Current portfolio internal rates of return exceed 20%. Each deal targets small, overlooked silver credits with low economic impact to the operator. This allows Silver Crown to extract value with minimal dilution or upfront capital.

Revenue and Delivery Growth

The company is generating revenue and on track to boost silver deliveries to more than 78,000 ounces by 2026 from 4,341 ounces in 2022. This growth is fueled by a combination of three closed royalties, two binding agreements and a pipeline of more than 10 active negotiations, positioning Silver Crown as one of the fastest-growing nanocap royalty firms in the market.

Strong, Experienced Team

A veteran of BMO, Canaccord and Star Royalties, Peter Bures is Silver Crown’s chief executive officer and founder. The board members and technical advisers have extensive experience in mining finance, operations, exploration and royalty structuring.