How We Actually Fund a Greenfield Mine in Gilgit-Baltistan (Equity vs Streaming vs Royalty)

A drill rig doesn't move itself up the Karakoram Highway for free. Getting one to a copper prospect above Skardu, running a season of core drilling, paying the lab in Islamabad and the crew — you're looking at real money before anyone's proven an ounce or a pound of anything.

That's the greenfield problem in a sentence. You spend hard cash on ground that hasn't been de-risked yet.

And here's the thing about mining finance Pakistan-side — most people who write us assume it's all equity or nothing. It isn't. We've spent the last three field seasons working through what actually fits a portfolio like ours (16 concessions, everything from placer gold in the Indus to antimony and molybdenum in the batholith). So let me lay out the three structures we keep coming back to, plainly, warts and all.

Equity — the honest but expensive one

Straight equity is what everyone reaches for first. You give a JV partner a slice of the project company, they put in exploration and development capital, and everyone shares upside and downside.

For a genuine greenfield play this is often the right call. Nobody sane wants to lend against a hole in the ground that hasn't hit a resource. Equity partners take that risk with you, and in return they want real control — board seats, technical sign-off, sometimes operatorship.

What I got wrong early on: I used to think equity dilution was the enemy. Guard the cap table, keep the percentage high. Then I did the maths on one of our copper-moly targets near Bunji. Holding 90% of a project you can't afford to advance is worth less than holding 55% of one that's actually drilling. A smaller share of something moving beats a big share of something frozen. Took me longer than it should've to accept that.

The catch with equity in Pakistan specifically is the exit. Overseas partners ask — reasonably — how they get their capital back and out. That means clean project-company structures, clarity on the Gilgit-Baltistan Mineral Rules and how the concession transfers or assigns, and a repatriation path through the State Bank. Get that documented up front or the deal stalls at legal review. I've watched it happen.

Streaming — capital now against metal later

A streaming royalty is where it gets interesting for a portfolio like ours, and honestly it's the structure I get most excited about for the gold and silver side.

Here's how it works in plain terms. A streaming company pays you a large upfront sum today. In exchange, they get the right to buy an agreed percentage of your future metal production at a fixed low price — often 20% or so of spot per ounce delivered. So they fund the build now, and they take their return in physical metal or the margin on it over the mine life.

Why it suits us: a stream doesn't dilute the concession ownership and it isn't debt sitting on the books demanding monthly service. For alluvial and lode gold across the Gilgit and Hunza river systems — where the by-product silver credits are real — a precious-metals stream on the by-product can fund a lot of the base-metal development without giving away the core asset.

But streaming isn't free money and I'd be lying if I said otherwise. Over a 12 or 15-year mine life you can end up handing over metal worth several times the upfront. The streamer's whole model is that time and volume work in their favour. So a stream makes sense when you're capital-constrained and metal-rich, and it's a bad idea when you could've raised cheaper money elsewhere. Read the delivery obligations carefully — some streams keep taking their percentage even if your grades disappoint and you're barely breaking even. That's the clause that bites.

Royalty — the lightest touch

A plain royalty is the simplest of the three. Someone pays you upfront (or buys an existing royalty), and takes a small percentage of gross revenue — say 1.5% to 3% NSR (net smelter return) — off the top for the life of the mine. No metal delivery, no operating involvement, no board seat. They just clip a coupon.

For the operator that's the least intrusive capital you can take. It comes off the top line so it hits you in the bad years too, but the percentage is small enough that it rarely breaks the economics.

We've thought about selling small royalties on the more advanced concessions to fund earlier-stage work on the pegmatite and rare-earth targets. It's a way of turning a defined asset into cash for greenfield mining finance elsewhere in the portfolio without diluting the whole company. Royalty investors like it because they get commodity exposure with none of the cost-overrun risk that eats mining equity alive.

What we actually do — usually a blend

Look, in practice it's rarely one clean structure. The mix we keep landing on goes something like this:

Equity from a strategic JV partner to carry the heavy exploration and feasibility spend, because that's the riskiest capital and equity is built to wear risk. Then a streaming royalty on the precious-metal by-products to fund a chunk of construction once we've got a resource statement that a financier will actually look at. And selectively, a royalty sale on a de-risked asset to seed the next target up the valley.

The critical-minerals angle changes the conversation too. When a European moly buyer or a defence-linked antimony offtaker is at the table, financing and offtake start to merge — they'll sometimes prepay against future tonnes, which behaves a bit like a stream but structured as an offtake advance. Those buyers care about security of supply more than squeezing the last dollar, so the terms can be friendlier than a pure financier's.

One number I'll leave you with. On a typical greenfield hard-rock target here, we reckon roughly 70% of total project spend lands before first revenue — drilling, feasibility, road access, the mill. That front-loaded curve is the whole reason the financing structure matters so much. Get the capital stack wrong and you run out of runway at 60% built, which is the worst place to be.

So when someone emails asking "do you want equity or offtake," my honest answer is usually — depends which concession, and can we do both?