Royalty Management Holding Corporation 2023 Year End Shareholder Letter
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Insights
The strategic pivot of Royalty Management Holding Co. (RMCO) towards investments in critical minerals for energy storage, infrastructure rehabilitation and disruptive technologies is indicative of a forward-thinking approach to capitalize on emerging market trends. The focus on lithium, graphite and cobalt is particularly prescient given the burgeoning demand for these materials in the battery market, driven by the global shift towards electric vehicles and renewable energy storage solutions. This demand is expected to grow exponentially, positioning RMCO favorably if they secure valuable sources and manage to establish a strong supply chain.
Infrastructure, being a cornerstone of economic growth, is another sector where RMCO's investment could yield substantial returns. The emphasis on modernization and expansion aligns with numerous government policies aimed at upgrading aging infrastructure, which is likely to receive continued funding and support. This could create a steady stream of income for RMCO through royalties, assuming they invest in projects with long-term viability.
Lastly, the investment in companies like Advanced Magnet Lab Inc. underscores RMCO's commitment to innovation. Patents and intellectual property are critical assets in the technology sector, often leading to monopolistic advantages and high-margin returns. RMCO's ability to identify and capitalize on such technologies could significantly enhance its portfolio's value and provide a competitive edge in the market.
The announcement of RMCO's intent to institute dividends by the end of 2024 signals a strong confidence in its cash flow generation capabilities and future profitability. This move can be attractive to investors seeking income-generating stocks, potentially increasing the stock's demand and price. However, the execution of this strategy is contingent on the successful expansion and performance of their investment portfolio.
RMCO's merger with Royalty Management Corporation and the subsequent access to public markets is a significant strategic step that could enhance liquidity and provide the capital necessary for further acquisitions. It is essential to monitor how effectively RMCO integrates these new assets and manages the potential risks associated with the commodities market, such as price volatility and regulatory changes.
Investors should consider the company's historical performance, management's execution skills and the overall market conditions for the commodities in question. While the sectors RMCO is targeting are poised for growth, the success of their strategy will largely depend on the company's ability to secure lucrative deals and manage the inherent risks of investing in raw materials and emerging technologies.
RMCO's investment focus on critical minerals for energy storage and new technologies positions the company at the heart of the energy transition. The energy sector is undergoing a significant transformation, moving away from fossil fuels towards more sustainable and renewable sources. The critical minerals RMCO is targeting are essential components in this transition, particularly for the development of batteries and high-efficiency magnets used in wind turbines and electric motors.
The company's establishment of a Critical Mineral Financing Division is a strategic move to tap into the growing demand for these resources. By financing the creation of raw material feedstock inventories, RMCO is potentially securing a foothold in the supply chain of these strategic materials. However, this sector is not without its challenges, including the geopolitical risks associated with sourcing minerals from various global locations and the technological risks linked to the rapidly evolving nature of energy storage solutions.
RMCO's ability to navigate these complexities and successfully invest in the right mix of resources and technologies will be crucial for its long-term success in the energy sector. Stakeholders should keep an eye on the company's progress in securing deals and partnerships, as well as any technological advancements that may disrupt the current market dynamics.
2024 growth will be centered around high value assets and cash flow generation with the goal of instituting dividend by year end.
FISHERS, IN / ACCESSWIRE / January 5, 2024 / Royalty Management Holding Co. (Nasdaq:RMCO) ("RMCO", or the "Company"), an innovative royalty company building shareholder value by acquiring and developing high value assets in a sustainable market environment, is pleased to provide its shareholders with its year-end 2023 business and Company update.
2023 was a transformational year for Royalty Management Holding Corporation (formerly, American Acquisition Opportunity Inc.): in late 2023 the Company completed its previously announced merger with Royalty Management Corporation ("RMC"), an operating company founded in 2021, and as a result RMC became a wholly owned subsidiary of American Acquisition Opportunity Inc. ("AMAO"). AMAO concurrently changed its name to Royalty Management Holding Corporation and its public ticker with the NASDAQ changed from AMAO to RMCO. The completion of the merger, along with RMC having access to the public markets through its publicly traded holding company, meant that RMC and the Company positioned themselves strongly for growth in 2024 and beyond.
Operationally, and with respect to the Company's royalty income portfolio, RMCO has continued to both expand its current investments and seek additional opportunities for investment in 2023, laying the foundation for several new investment opportunities in the coming year. Coming into 2024 and for the intermediate term, the Company looks to expand its investments and portfolio of royalty income into several key areas of focus:
- Critical minerals for energy storage: In 2024, RMCO is targeting several key investments that focus on resources and minerals needed for the economic transition to battery-based energy storage and power. RMCO believes that the transition to energy storage through the use of batteries has significant growth throughout the next decade within the United States and worldwide. Examples of these minerals include lithium, graphite, cobalt, and others minerals. RMCO is in discussions with several ore and recycled sources of these key minerals to help fund the development and production of the ores bodies in exchange for an overriding royalty on mineral sales. Additionally, the Company recently established its Critical Mineral Financing Division which has an initial focus on investing in the raw material supply chain of critical minerals by financing the creation of raw material feedstock inventories from sources around the globe, to be later used in the refining of these strategic materials into high-grade materials for the creation of products focused on energy storage and efficiency, such as batteries and high-efficiency, permanent magnets.
- Infrastructure rehabilitation and expansion: Similar to the Company's focus on critical minerals for energy storage, RMCO is also focusing 2024 on completing investments in the resources and raw materials required for rehabilitation or advancement of key economic infrastructure, such as steel, concrete, specialty metals, and alloys. With anticipated increases in modernization of several large economies around the globe, RMCO sees this sector as a key performer in the coming decades and is evaluating investments in the raw materials to help participate in this economic expansion.
- New, disruptive technologies that support energy storage and infrastructure. In addition to the two themes outlined above, RMCO is evaluating several companies and intellectual property rights that support new and disruptive technologies in the fields of energy storage and infrastructure. For example, in addition to the Company's investment into Advanced Magnet Lab Inc. (more on that below), a company that has developed and patented a new way to make permanent magnets perform more efficient, productive, and cost-effective through new research, intellectual property, and patents. This technology is used in a variety of industries, such as aerospace and defense. RMCO is evaluating other investments in technologies that allow the Company to increase its returns in new and emerging technologies.
Some of our key investments initiated or expanded in 2023 include the following companies:
Advanced Magnet Lab Inc. ("AML"): AML was founded in 1995 to develop novel solutions to the world's most complex challenges with superconductivity and magnetics. The way the company accomplishes this is through the development of intellectual property and patents around new ways to make new and more efficient magnets for a wide variety of specialty industries. RMCO is incredibly excited about the prospects of successful commercialization of this technology, with several high-profile customers of AML currently evaluating the integration of AML's magnets and applications into their systems. RMCO is able to participate in the success of AML through both an equity-derivative investment into AML and through a sponsored research program with AML to fund the commercialization of additional intellectual property in exchange for a royalty on sales.
Ferrox Holdings Ltd ("Ferrox"): Ferrox holds mining rights in South Africa for a variety of minerals that are in high demand, such as ilmenite concentrate, titanium metal, titanium dioxide, and ferro titanium along with magnetite concentrate and pig iron. RMCO has an investment into Ferrox in the form of a convertible debt and equity that allows the Company to participate in the success of Ferrox as the company expands its mining operations and identifies other key minerals in its reserve, such as the potential for Vanadium extraction and sale. More on Ferrox can be found at their website, www.ferroxholdings.com.
Center for Advancing Sustainable and Distributed Fertilizer Production ("CASFER"): RMCO has participated as a founding member of the CASFER research and development center, a recently formed center at Texas Tech University that was funded by its founding members and through a large grant from the National Sciences Foundation. CASFER's mission is to develop technology around the capture and reuse of nitrogen and phosphorus from agriculture fertilizers before the run-off from the farm fields enters the waterways or the municipal treatment plants, thereby allowing for commercial recycling of these key fertilizers and reducing the environmental impacts. With RMCO's investment as a founding member, the Company is able to obtain commercialization rights to certain technologies developed by the research center. More on this center can be found at www.casfer.us.
RMC Environmental Services LLC ("RMC ES"): RMC ES is a wholly owned subsidiary of RMCO that is currently revenue generating and provides environmental remediation and management services for real estate development projects on controlled properties within commercially expanding locations. For example, RMC ES is managing the development of a commercial property through the placement of additional clean dirt fill on the site, and in exchange RMC ES receives a royalty fee on each load of fill sourced by RMC ES. In some instances, RMC ES sells the clean fill dirt to other parties and receives a secondary royalty. The work performed by RMC ES at this location will result in the eventual commercial development of the property. RMC ES is working to expand its revenues from its remediation projects in 2024.
As RMCO looks towards 2024, there is a lot of reason to be excited about the position of the company and its ability to capitalize on continued investment in key companies and industries, under investment structures that are designed to protect RMC and its shareholders, while also working to maximize the potential for outsized returns.
About Royalty Management Holding Corporation
Royalty Management Holding Corporation (NASDAQ:RMCO) is a royalty company building shareholder value to benefit both our shareholders and communities by acquiring and developing high value assets for recurring income in all market environments. The company's model is to acquire and structure assets, equity interests, royalty interests and cashflow streams around assets that can support the communities by monetizing the assets with a future focus. For more information, please visit royaltymgmtcorp.com.
Forward-Looking Statements
This press release contains statements that constitute "forward-looking statements," including with respect to the initial public offering. No assurance can be given that the offering discussed above will be completed on the terms described, or at all. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those that will be set forth in the "Risk Factors" section of the Company's registration statement and proxy statement/prospectus to be filed with the SEC. Copies will be available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Investor Contact:
RedChip Companies Inc.
Robert Foley
1-800-RED-CHIP (733-2447)
Info@redchip.com
Company Contact:
Thomas Sauve
Chief Executive Officer
(317) 855-9926
SOURCE: Royalty Management Holding Co.
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