Three standout streaming and royalty deals in Australia in recent weeks could pave the way for the alternative finance methods to become more accepted.

Widely used in North America, streaming deals provide a miner with upfront capital, in return for the discounted purchase of some production. Royalty deals typically offer upfront cash in return for a percentage of revenue.

ASX-listed BHP announced “the most valuable streaming transaction to date” in February over silver produced as a byproduct at its Antamina polymetallic joint venture mine in Peru.

BHP is set to receive US$4.3 billion from Wheaton Precious Metals in exchange for a portion of Antamina’s silver, with BHP to be paid 20% of the spot silver price at the time of delivery.

A week later, ASX-listed Minerals 260 struck a A$220 million funding agreement with Franco-Nevada, the leading gold-focused royalty and streaming company’s largest-ever investment in Australia.

Franco-Nevada will pay $170 million to increase its royalty over the Bullabulling gold project to 2.45% and invest $50 million in shares.

Evolution Mining renegotiated a streaming deal, that had been set up before the miner acquired its interest in Northparkes, with Triple Flag in February.

The new deal will see Evolution receive A$120 million and reduce the streaming rates on the E44 deposit, from 65.7% to 25% of payable gold production, and from 100% to 37.5% of silver. Triple Flag will pay Evolution 10% of the spot price for gold and silver delivered under the agreement.

The above deals come after stellar fundraising conditions for explorers in the December quarter.

BDO’s latest analysis shows explorers secured $5.63 billion in the December quarter, up 61% on the September quarter, representing “the largest quarterly financing inflow since we began our analysis in 2013”.

Equity was the dominant source of capital, accounting for 89% of funds raised.

This dominance could be challenged.

The appeal of streaming and royalty deals lies in the lack of dilution, according to industry figures including Erik Anderson from international commodities trading firm Practerra on the sidelines of a mining conference held at the Sydney Masonic Centre this month.

Sean Russo, joint managing director and principal at Noah’s Rule, said the historical bias against streaming and royalties was “somewhat irrational” and due to misunderstanding, adding the broker community had a vested interest in not promoting the alternatives to raising equity.

Regarding the BHP deal, Russo said no one bought BHP shares for exposure to silver so if the company could have the value recognised and gain $4 billion in cash to help meet capital requirements, why not?

“At the moment, it seems the logical thing to do,” he said.

As an investor in Minerals 260, led by major shareholder Tim Goyder, Russo said he was “over the moon” with the recent deal.

“I like to invest alongside people who behave like owners, or are owners,” Russo said.

“Dilution avoided early in the life of a company is very important.

“So here we have a situation where they raised $220 million bucks, $170 million of that from a gold royalty that avoided having to probably expand their shareholder base otherwise by another 20-25%.

“So as an existing shareholder of Minerals 260, I was excited before that deal but I’m over the moon now, because there’s very few additional shareholders on the register, but we’ve got $170 million to drill … so what’s not to love?

“The long-term consequence of that, if they use that money to find gold, and the royalty guy does well, fantastic.”