So it can buy royalty streams from coal mining companies (most collect royalties from reserves as well as mining their own coal) at five to seven times cash flow and still boost returns to its own unit holders.

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Historically gold companies calculated total cash costs per ounce by including only mining, processing, selling and royalty costs, said Imaru Casanova, senior gold analyst and investment team member of the Van Eck International Investors Gold Fund (INIVX) and the Van Eck Global Hard Assets Fund (GHAAX).

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Pauline Marois, the new premier of Quebec, made waves in the mining industry with comments saying she would initiate a minimum 5% royalty on metal production as well as impose a 30% tax on mining earnings above a certain level during the election campaign.

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In a debate over the weekend between the Liberal party, PQ, Coalition Avenir Quebec and Quebec Solidaire, Marois said she would impose a minimum 5% royalty rate on the gross value of all mining production.

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No doubt much of this is just bleating by unhappy mining executives as they negotiate with the government to lower the royalty rates.

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The other option is to invest in silver mining companies or Silver Wheaton (NYSE: SLW), which is a silver royalty company whose stock price is highly correlated to spot silver prices.

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