Gold Royalty's Strategic Deepening of Exposure to the High-Performance Borborema Gold Mine

Gold Royalty Corp. has emerged as a pivotal player in the evolving landscape of the Brazilian gold sector, with its strategic deepening of exposure to the Borborema Gold Mine exemplifying a masterclass in royalty stacking. By layering multiple royalty interests in a jurisdiction poised for sustained growth, the company is positioning itself to capitalize on compounding value as the mine ramps up production and Brazil's mining regulatory framework matures.

A Multi-Layered Royalty Strategy

Gold Royalty's exposure to Borborema is not a single bet but a layered portfolio of interests. The company initially secured a 2.0% net smelter return (NSR) royalty on the mine, which steps down to 0.5% NSR after 725,000 ounces of payable gold are produced. In a bold move, it recently acquired an additional royalty from Dundee Corporation for $45 million, comprising a 1.5% NSR on the first 1.5 million ounces and a 1.0% NSR until 2.0 million ounces are produced. This "tiered" structure ensures Gold Royalty captures higher returns during the mine's early, high-margin production phase while retaining a residual stake in long-term output.

The company further solidified its position by investing $31 million in a 2% NSR royalty and providing a $10 million royalty-convertible gold-linked loan to Aura Minerals, the operator of Borborema. These investments were underpinned by a $40 million private placement from Queen's Road Capital and Taurus Mining Royalty Fund, underscoring institutional confidence in the project's potential.

Borborema's Production Surge and Long-Term Potential

Aura Minerals' Borborema Gold Mine has become a standout performer in Brazil's mining sector. In Q4 2025, the mine delivered a record 15,777 gold equivalent ounces (GEO), a 54% increase from the prior quarter, driven by improved metallurgical recovery rates (91.7%) and higher-grade ore (1.42 grams per ton). Commercial production, declared in September 2025, is now operating at 80% of design capacity, processing 4,500 tonnes per day.

For 2025, Borborema contributed to Aura's total output of 285,380 GEO, exceeding guidance and setting the stage for a long-term target of 600,000 GEO by 2026. With the mine's ramp-up phase ongoing and exploration potential remaining robust, Gold Royalty's stacked royalties stand to benefit from both near-term production gains and future expansion.

Brazil's Regulatory and Market Tailwinds

Brazil's mining jurisdiction is undergoing a transformation that amplifies the value of royalty stacking. The National Mining Agency (ANM) is finalizing regulatory reforms to clarify statutory royalty calculations and expand collateral options for mineral rights, enhancing transparency and credit accessibility for operators. Meanwhile, the government's National Policy on Strategic Minerals, launched in April 2025, aims to attract investment through fiscal incentives and streamlined permitting, positioning Brazil as a critical supplier for the global energy transition.

Despite challenges such as potential U.S. tariffs on Brazilian mineral exports, the country's $68.4 billion investment pipeline for 2025–2029 and its vast reserves of lithium, niobium, and copper signal a resilient sector. For Gold Royalty, these developments reduce jurisdictional risk while increasing the likelihood of sustained production growth at Borborema.

The compounding effect of Gold Royalty's strategy lies in its ability to leverage multiple revenue streams from a single asset. As Borborema's production climbs, the company's tiered royalties ensure higher cash flows during the mine's most profitable phase, while its debt-like instruments (e.g., the gold-linked loan) provide downside protection. Additionally, Brazil's regulatory improvements and the global shift toward critical minerals create a favorable backdrop for long-term value retention.

For investors, this approach offers a low-risk, high-reward proposition. By avoiding operational exposure while securing a stake in a high-growth asset within a jurisdiction undergoing structural reforms, Gold Royalty is demonstrating how royalty stacking can transform volatile mining projects into predictable income streams.

Conclusion

Gold Royalty's deepening exposure to Borborema is a testament to the power of strategic royalty stacking in a high-growth mining jurisdiction. With production at the mine surging and Brazil's regulatory environment aligning with global demand for critical minerals, the company is well-positioned to deliver compounding returns. As Aura Minerals continues to unlock Borborema's potential, Gold Royalty's layered interests stand to benefit disproportionately, making this a compelling case study in modern mining finance.