Thank you for downloading this programme.

In this edition of the bottom line,

from the mines of West Africa to the workshops of an East London jewellery maker,

Evan Davis and guests discuss the business of gold.

Hello and welcome to the programme.

We are talking gold today.

The Inca's believed it was the sweat of the sun.

The Aztecs thought it was the excrement of the gods,

but we're going to think about it as a business, a supply chain,

albeit a very special and somewhat mysterious one.

The value of gold derives not from its functionality,

although it has its industrial and aesthetic uses,

but it is very different to oil.

So what makes it so valuable and how rewarding is it

to work in the gold supply chain? My guests are all involved in different parts of the gold

industry, so let's take a few minutes to meet them. And first up is Nolan Watson, founder,

president, chief executive of a company called Sandstorm Gold. It's based in Vancouver, Canada, and it's

what's called a gold streaming company. And I think you should explain, Nolan, what gold streaming

is because the basis of your business is you're putting up the money for the people who want to

build the mines. Gold streaming is basically a way to finance assets into production. So if you've got a mine and you want to build it and you need to raise the capital to do it, you either have to raise equity from your shareholders or you have to borrow money from banks. And really in the last 10 years, there's been a new type of finance that's come along, which is a way to receive money by the mining company to build the mine. And in exchange, they give a contract back to the streamers. We get to purchase a certain percentage of their production for the entire life of the mine. And we pay a fixed ongoing price. It's not a royalty you're getting. You're getting the right to some of the gold or a right to buy some of the gold. Yeah, we have the right to buy a certain percentage. So a typical contract might say something like we get to buy 8% of the gold they produce and we buy it at $500 an ounce. And so every time they produce some gold, when we get that 8%, we pay them 500. We sell that gold on the exact same day at the spot price, whatever that spot price. So hopefully, enormous profit, hopefully, on the day you buy it. It is, but it's also a risky business from the streaming companies at the same time because we have to outlay large amounts of capital on day one, and there has been more than one time, unfortunately, where you outlay capital and the mine gets half-built and the industry crashes, and nobody can raise money to continue building the mine, and you've got you own part of a half-built mine.

Okay, so Nolan, just remind me why this way of financing a mine?

Yeah, so traditionally, if your two options were equity or debt financing,

...