We conduct due diligence and apply sound investment management practices to mitigate risks and maximize opportunities. We incorporate ESG factors into our investment decision-making process and strive to continually evaluate the effectiveness of our approach to meet, or exceed, industry-best practices and the expectations of our stakeholders.

As a capital provider, OR Royalties does not have direct control over the operation or sustainability activities of our mining partners’ operations. However, we recognize that supporting responsible operators is a crucial part of disciplined capital allocation. We take a comprehensive approach to due diligence by reviewing and assessing performance in a range of areas, including ESG, to identify, assess, and mitigate any potential risks before investing in an asset. The Board, particularly the Governance, Nomination and Sustainability Committee, provides oversight of sustainability-related matters and is kept informed of potential emerging risks and opportunities through regular updates from the Executive Team.

The due diligence framework, updated in 2024 to formally include ESG, provides a structured overview to guide investigative efforts, mapping out key activities that ensure a thorough and systematic evaluation of risks and opportunities. Our due diligence process continues to evolve as practices, risks, and expectations change.

Due Diligence Conducted by or for any new Investment Opportunity

will include, but is not limited to, a review of the following aspects:

Technical

Systematically assess potential investment opportunities by scrutinizing technical aspects, starting with a bottom-up approach that analyses data quality, mineral inventory, extraction and processing methods, and associated costs, ultimately forming the basis for measuring overall investment attractiveness.

Financial

Assess the mining partner’s ability to fund all project stages. We take into consideration the partner’s technical capability, track record, available potential capital sources, capital structure, and future commodity price assumptions.

Legal

Conduct thorough legal due diligence, assessing potential mining partners and projects, understanding legal frameworks in jurisdictions of interest, and utilizing its findings for investment structuring and valuation. When necessary, external legal counsel is engaged to assist in areas such as foreign investment, regional mining codes, land ownership, and corporate and environmental laws.

Political

Prioritize comfort around jurisdictional risk in the evaluation of potential royalty or stream investments, with an emphasis on a comprehensive understanding of socio-political trends, a preference for mining partners with regional expertise, and a strong preference for jurisdictions with a robust rule of law.

Environmental

Evaluate projects based on their intrinsic characteristics and engineered design to identify those with optimally reduced environmental footprints, including assets that demonstrate low carbon intensity, efficient water and energy use, and thoughtful approaches to waste and land management. We place particular emphasis on environmental factors such as biodiversity, climate change, tailings management, water stewardship, permitting, and overall environmental performance when assessing potential investments. We seek partnerships with companies that align with our expectations for responsible operating practices, transparency, and continuous improvement in sustainability initiatives.

Social

Conduct thorough due diligence on mining partners’ human rights practices and expectations and promote respect for human rights across partner operations. Prioritize the review of a potential partner’s approach to community relations and social license, including Indigenous engagement, workforce development, and health and safety. We seek partnerships with companies that demonstrate strong social practices, respect for human rights and credibility with all key stakeholders and rightsholders.

Governance

Review mining partners’ business ethics and governance practices during its due diligence process, with the knowledge that adherence to laws and industry best practices is vital for a project’s success. Additionally, well-designed corporate governance enhances internal controls, maximizes risk management, and increases the likelihood of mining operation success.