Equity vs Royalty Calculator
What is your equity raise really costing you?
Enter your project parameters to compare the true cost of an equity placement against non-dilutive royalty finance, including foregone earnings, cost of capital, payback period, and an indicative royalty valuation.
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Project Parameters
All inputs update results instantly
Inputs personalised
0%
Share structure
Revenue & royalty
Royalty valuation
Current Share Price
A$per share
Shares on Issue
M shares
Raise Price
15%
1%40%
Discount to market price
Issue price: A$0.383
A$issue price
Price you will raise at
Implied discount: 15.1%
Capital Required
A$M
Total amount to raise · ProspEx issues fractionally — your royalty is distributed across a broad investor base under a single agreement, rather than concentrated with a single counterparty with no path to liquidity.
Projected Annual Revenue
A$M / yr
Expected mine revenue once in production
Net Profit Margin
20%
1%60%
Used for foregone-earnings calc · typical mining range 15–35%
Royalty Rate
2.00%
0.5%5.0%
Applied to net revenue after allowable deductions below
Allowable Deductions
%
% of revenue deducted before royalty is applied — e.g. transport, treatment & refining charges. 0% = gross revenue royalty.
Mine Life
15 years
5 yrs40 yrs
Royalty runs for the full life of mine
Project Start Date
When production begins — royalty cashflows start here
Project Stage
Used to determine typical market NAV multiple range
Commodity Type
Precious metals royalties typically attract higher NAV multiples
Buyer Discount Rate
8.0%
4%20%
Rate a royalty buyer applies to future cashflows
Assumed Share Price Growth
8.0% p.a.
0%30%
Annual share price appreciation assumed for equity IRR calc · reflects the return new shareholders expect
Analysis Results
Updates instantly as you adjust parameters
Equity Raise
New shares to issue
65.4M shares
Dilution to existing holders
19.5%
Issue price
A$0.383 (15.0% disc.)
Total foregone earnings (mine life)
EPS × new shares × mine life · at 20% net margin
Royalty Finance
Shares issued
Zero
Dilution to existing holders
0%
Annual royalty payment
A$5.9M
Total royalty payments (mine life)
At projected revenue less allowable deductions
Revenue retained after royalty
98.0% of gross revenue retained
Royalty Valuation
Buyer's perspective
Royalty price (= capital raised)
What the miner receives
NPV of cashflows at buyer's rate
What the royalty is worth at 8.0% discount rate
Price-to-NAV multiple
Buyer pays price ÷ NPV — below 1× = buyer discount, above 1× = premium
Lead time to production
Pre-production discount applies
Market benchmark — typical price-to-NAV range
0×
0.5×
1.0×
1.5×
2.0×
Non-precious · Development stage · typical range: 0.5× – 0.8×
Market range
Your multiple
At 0.52×, your implied price-to-NAV multiple sits within the typical market range of 0.5×–0.8× for a non-precious development stage project. This is a commercially realistic transaction — the royalty price is consistent with what informed buyers would expect to pay at this stage. With 1.1 years to production, the pre-production discount is the dominant pricing factor — buyers reduce their offer the further a project is from first cashflow, reflecting time value of money and development risk. As the project advances toward production, expect the buyer discount rate to compress and the achievable multiple to improve.
Share Register — Before vs After
After Equity Raise
81%
19%
Existing shareholders
New placement holders
ongoing dilution
Ongoing dilution to existing holders
New shareholders participate in earnings from this project and all other assets in the company for the duration of the mine life.
After Royalty Finance
100% existing holders
Existing shareholders
intact
Royalty holders — asset-level only
No equity dilution
Royalty attaches only to this project's revenue — all other assets remain unencumbered.
ProspEx advantages
✦
Shareholder participation
Eligible existing shareholders can invest in the royalty raise directly — accessing the cashflow stream alongside new wholesale investors.
↩
Gradual buyback — on your terms
Because royalties are issued fractionally across many holders, the miner can make offers to buy back units incrementally through the ProspEx secondary market — without needing to repurchase the whole royalty at once, which is what makes traditional buybacks prohibitive on cash flow.
Cost of Capital Comparison
Miner's perspective
Metric
Equity Raise
Royalty Finance
Cost of capital
Annualised cost to the miner — what the capital provider earns. Lower is cheaper.
58.2%
p.a. to equity investor
at 8.0% share price growth
15.6%
p.a. to royalty buyer
paying A$25M royalty price
Payback period
Years until the miner has paid out more than it raised. Longer is better.
1.7 yrs
yrs to repay via earnings
4.3 yrs
yrs to repay via royalty
Total payout multiple
For every A$1 raised, how much flows out over the mine life. Lower is better.
8.71×
× in foregone earnings
3.53×
× in total royalty payments
Cumulative earnings impact
Total reduction in net profit over the mine life. Like-for-like on an earnings basis. Lower is better.
A$217.9M
foregone net profit
EPS reduction × new shares × mine life
A$17.6M
royalty earnings drag
royalty payments × net margin × mine life
⚖
Royalty is the lower cost of capital on all four measures — lower annualised rate, slower payback drain, lower total payout, and less cumulative earnings drag over the mine life.
Green = lower cost to the miner on that metric.
Cost of capital = annualised rate the miner pays for money — equity IRR assumes share price grows at the stated rate p.a. plus earnings dividends; royalty IRR is back-calculated from the buyer paying the royalty price.
Payback: longer = more favourable for the miner (slower cash drain).
Payout multiple: lower = less total cash given back per dollar raised.
Earnings impact: cumulative reduction in net profit — equity drag = foregone EPS on new shares; royalty drag = royalty payments × net margin. Like-for-like on an earnings basis.
ProspEx Analysis
Royalty finance is the lower cost of capital on a like-for-like basis
A 2.00% royalty on A$300M revenue costs A$5.9M per year. The royalty buyer, paying A$25M, earns an implied IRR of 15.6% — versus 58.2% for an equity investor assuming 8.0% p.a. share price growth. Total royalty payments of A$88.2M represent a 3.53× payout multiple, versus 8.71× for equity. No dilution, no placement discount, and no permanent transfer of equity ownership.
Why work with ProspEx
ProspEx runs a full competitive capital raise process — approaching listed royalty companies, institutional investors, family offices, and wholesale investors simultaneously so you receive the best available terms.
Your royalty is issued fractionally across a broad and diversified investor base under a single agreement. Where eligible, existing shareholders can be offered the opportunity to participate as royalty holders — giving your register a direct interest in the royalty cashflow stream. Larger institutional investors can participate as cornerstone participants alongside the broader wholesale market.
ProspEx's platform is designed to support a secondary market for royalty interests — creating a mechanism for the miner to make offers to repurchase units incrementally over time, without the cash flow burden of buying back the royalty in its entirety — a flexibility that is not available under a conventional bilateral royalty arrangement.
Your royalty is issued fractionally across a broad and diversified investor base under a single agreement. Where eligible, existing shareholders can be offered the opportunity to participate as royalty holders — giving your register a direct interest in the royalty cashflow stream. Larger institutional investors can participate as cornerstone participants alongside the broader wholesale market.
ProspEx's platform is designed to support a secondary market for royalty interests — creating a mechanism for the miner to make offers to repurchase units incrementally over time, without the cash flow burden of buying back the royalty in its entirety — a flexibility that is not available under a conventional bilateral royalty arrangement.
Methodology:
Equity IRR: the annualised return to placement investors, assuming annual dividends from net earnings plus share price appreciation at the stated growth rate. Calculated via Newton-Raphson IRR solver.
Royalty IRR: back-calculated from the buyer paying the royalty price (= capital raised), receiving annual royalty payments from project start date.
Payback period: years until cumulative distributions to the capital provider (earnings to shareholders / royalty payments) equal the capital raised.
Payout multiple: total distributions over mine life ÷ capital raised. Foregone earnings = revenue × net margin ÷ shares × new shares × mine life.
Royalty NAV: DCF of royalty cashflows discounted at buyer's rate from project start, mid-year convention.
All figures pre-tax, flat revenue assumed. Indicative only — not financial advice.
Equity IRR: the annualised return to placement investors, assuming annual dividends from net earnings plus share price appreciation at the stated growth rate. Calculated via Newton-Raphson IRR solver.
Royalty IRR: back-calculated from the buyer paying the royalty price (= capital raised), receiving annual royalty payments from project start date.
Payback period: years until cumulative distributions to the capital provider (earnings to shareholders / royalty payments) equal the capital raised.
Payout multiple: total distributions over mine life ÷ capital raised. Foregone earnings = revenue × net margin ÷ shares × new shares × mine life.
Royalty NAV: DCF of royalty cashflows discounted at buyer's rate from project start, mid-year convention.
All figures pre-tax, flat revenue assumed. Indicative only — not financial advice.
Context — Multi-Project Companies & Royalty Holders
This analysis understates the cost of equity for companies with multiple projects
When you issue equity to fund one project, new shareholders receive a proportional claim on every project in the company — current and future. The foregone earnings above only captures dilution against this project's revenue. The true cost is higher once you include earnings from your other projects that new shareholders will also participate in. A royalty is tied exclusively to this project's gross revenue — your other assets, exploration licences, and future discoveries remain entirely unencumbered.
For royalty holders — why asset-level exposure is a structural advantage
A royalty holder's position is asset-specific by design. By attaching to a single asset's revenue rather than the equity of a company, the royalty holder achieves cashflow seniority over equity holders, dilution immunity (the royalty rate cannot be reduced by future equity raises or capital structure changes), and structural longevity — the royalty survives changes in ownership, corporate restructures, and project restarts that would impair equity value. Where an equity investor's return is tied to corporate execution and strategy, the royalty holder's return is tied to the underlying resource.
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