Royalty companies are businesses that provide financing to mining companies in exchange for a share of the revenue generated from the extraction of minerals. Instead of owning the mines, these companies invest in projects and receive a percentage of the profits, which can be more stable and less risky than traditional mining operations. These companies often focus on precious metals like gold and silver, allowing them to benefit from rising commodity prices without the operational costs and risks associated with mining. By diversifying their investments across multiple projects, royalty companies can manage risk while providing capital to the mining sector.