“If you believe that gold and silver prices are due to recover, like I do, then you should look for plays that can surf the wave. In particular, you want companies unburdened by debt and not locked into large, complex, expensive projects. Does that ring any bells? Let’s consider royalty companies… Royalty companies own interests in mine production without taking on operational risks and costs. That is, royalty guys ‘loan’ money upfront to capitalize the mine developers, usually at an early stage. In return, the royalty company lays claim to an ongoing income stream generated in the future by the mining project. It’s a well-understood form of project finance, in many instances.”
http://dailyresourcehunter.com/gold-by-the-planeload-precious-metals-update-part-ii/