Traditional estimates of returns in the low single digits may underestimate the real value of streaming deals, which can secure a supply of metal for decades, Franco-Nevada Chief Executive Officer David Harquail said. They work much like an option, a contract that grants the holder the right to buy a security at a price in the future.

Earlier this month, Franco-Nevada purchased a stream of silver output from the Antamina mine in Peru owned by Teck Resources Ltd. for $610 million, and agreed to pay 5 percent of the spot price for the metal at the time of delivery.

“That 5 or 6 percent return is really 7 or 8 percent in those initial 10 or 20 years because I can still sell, in 20 years, that asset for exactly what I paid for it," Harquail said in an interview.

Toronto-based Barrick, the world’s largest gold producer, announced an arrangement in August with Royal Gold for $610 million upfront. Glencore, the mining giant that is shedding assets to trim its $30 billion debt load, is seeking to raise more than $1 billion by selling gold and silver streams, according to two people familiar with the situation.

Eoin Treacy's view

Royalty streams differ from options in some significant ways but most important of all is that they don’t expire. You get a call on the production for a very long time and in a bull market that is something that simply cannot be bought at an attractive price. Therefore if one believes prices will recover at some point in future then buying streaming rights from attractive assets, when prices are low, makes a great deal of sense. This is particularly true for pension funds seeking a reasonably non-correlated asset. 

Franco Nevada has both energy and precious metals. The share rallied impressively over the last couple of weeks to break back above the 200-day MA and is now challenging the medium-term progression of lower major rally highs. A sustained move above $55 would suggest a return to demand dominance beyond the short term. 

Royal Gold bounced in September from the region of the 2013 lows and a process of mean reversion is underway. It will need to hold the $40 area on the first meaningful pullback to demonstrate demand coming back to dominance at progressively higher levels. 

Silver Wheaton continues to revert back up towards its mean and a sustained move above the MA would signal a return to medium-term demand dominance. 

Canadian listed Osisko Gold Royalties posted an upside weekly key reversal from above its August low and a clear downward dynamic would be required to question current scope for additional higher to lateral ranging.