I’ve split my gold research into two very distinct categories in my paid publications.
In one service (Golden Portfolio, or GP for short) I focus entirely on what I consider to be the best and safest long term gold investments: gold royalty companies. Intelligent people may disagree, but I also happen to believe gold royalty companies are also the best long term investments, period.
Only tech stocks, certain crypto-currencies and a handful of mining stocks have been able to outperform gold royalty companies, but not without a lot more uncertainty, risk and volatility.
Royalty companies are super-simple businesses. They typically have fewer than 40 employees, and frequently a lot fewer. Miners, on the other hand, have thousands of employees…
All royalty companies do is lend capital to miners in exchange for a percentage of gold production and/or revenues – typically for the lifetime of a mine, though not always.
There are some minor differences between each royalty firm, but in general, royalty companies receive a share of either physical metal, cash, a combination or they negotiate a streaming deal that allots the company a certain amount of metal they can purchase at a fixed price.
Royalties also come out of the revenues, not the final profit.
You’ll notice that all of these arrangements have something in common: they all tend to give the royalty company huge upside to the price of gold WITHOUT having to continually inject more capital. Most of the time, these royalty agreements are a one-time deal.
And these royalty firms have almost no overhead. Many of them have corporate headquarters in a tiny office suite in some ordinary office building. They don’t own any mining equipment. They have no inventory, warehouses, or fuel costs. That means almost all of the profits hit the bottom line. They’re some of the most capital efficient businesses in the world, in any sector.
These companies tend to get juicy deals from miners because gold mining is capital intensive, and not all gold miners can access traditional financing from banks or other lenders. Sometimes the terms are unbelievably profitable.
For a hypothetical, a gold royalty firm might make a one time injection of $10 million to a gold miner, and get 30 years of returns that might come out to $1 billion.
Sometimes they get gold royalties that amount to them buying gold for $1/oz.
It’s a fantastic business. If I had to tell my kids to buy one kind of business and only one kind to hold it forever, it would be a gold royalty stock in my GP portfolio.
The oldest gold royalty firm has only been around since the 1980s – and it’s returned over 50X to those early shareholders.
In my other research, (Golden Portfolio 10X) I focus on gold miners with the chance to multiply your investment 10-fold – or more.
These miners are on the complete other side of the coin of gold investing. They’re much more speculative and are almost never long term investments. You want to buy them at huge discounts to their net asset value (NAV), and then sell them once the market catches onto their value, hopefully at a significant return.
What makes miners more risky?
For one, they do chew up capital. Even before a single ounce comes out of the ground, there’s an unbelievable amount of work to do. Finding gold is hard. Proving how much there is in the ground takes time and expertise. Getting approval from government officials is another whole ball of wax. Then building even a small mine will cost you hundreds of millions of dollars. Running the mine itself requires many employees and constant work.
If you’ve ever seen the show Gold Rush on Discovery, you know that running even a small mine is nothing but one headache after another. Equipment breaks down. Employees quit. The weather does not cooperate. Or the gold deposit is not as rich as first projected.
A lot of these problems can be dealt with by only investing with competent teams who have built and run successful mining operations before. It also helps to have close to 20 years experience as a gold analyst (as I do) so you know what you’re looking for.
My main focus once I filter out all of the garbage is that net asset value number I mentioned. I’m only interested in finding companies that have massive upside – which means overlooking 95% of the companies in the market to find value.
This method has led me to finding some of the biggest stock returns you’ll hear of anywhere. Once I found a company called Silvercrest Mines that soared over 8,300%. Another time I discovered New Market Gold that rose over 2,000%. Right now, I have a couple dozen companies in my GP10X portfolio that are close to 100% gains in 2025 alone, and an average gain of 60% for the portfolio.
I mentioned last week that you have to be careful about simply buying an ETF like GDX. But you also need to be very careful about what kind of gold stocks you’re buying. Especially in the mining space, almost all of them are garbage and you shouldn’t buy a single share.
But the rare exceptions can give you substantial gains in a very short time period.
Make sure you know what kind of gold investment you’re making.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio