Why Frank Holmes Loves Royalty Companies

Precious Metals

Frank Holmes of US Global Investors on the gold price, gold market and what he looks for in a gold company.

At the recent Canadian Investor Conference in Vancouver, the Investing News Network had the chance to speak with Frank Holmes, CEO of US Global Investors (NASDAQ:GROW), about the gold price, gold stocks and the overall state of the market.

So far this year, Holmes hasn’t seen any real surprises from the gold price, although he noted that gold is normally a better performer in the second half of the year. When asked about what might push the gold price up, he suggested that a catalyst could be a move from China to make the renminbi a global currency alongside the euro, the yen and the US dollar.

While he admitted that the market is certainly “in a paused stage” due to the threat of rising interest rates, Holmes added that “stocks are still the place to be.”

Speaking a bit about gold companies, Holmes said that he looks for management teams that are “good stewards of capital,” and mentioned royalty companies in particular.

“I always love the royalty companies because you have a competitive advantage with that superior model,” he said. Holmes specifically picked out Franco Nevada (TSX:FNV,NYSE:FNV), Silver Wheaton (TSX:SLW) Royal Gold (TSX:RGL,NASDAQ:RGLD) and Osisko Gold Royalties (TSX:OR) as key companies. “I think that these are great companies for any investor,” he added.

On the junior side, Holmes mentioned that Klondex Mines (TSX:KDX,OTCQX:KLNDF) is “a big holding” for US Global Investors. “The CEO is very much a frugal person in how he runs the business,” he said. “I think that shows up in higher returns on capital.”

Watch the video above for more of what Holmes had to say.


For full disclosures, or for more information, please contact US Global Investors here.

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Klondex Mines is a client of the Investing News Network. This article is not paid-for content.

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