Patriotic Energy Mineral Royalty Calculator

Keeping critical minerals in American hands

American landowners increasingly control deposits of rare earth elements, lithium, and strategic metals essential for defense and clean energy. Patriot investors must decide whether to lease mineral rights to major corporations or self-develop to ensure supply chains remain domestic. The Patriotic Energy Mineral Royalty Calculator models both paths. It calculates royalty revenue over time, including escalation clauses, and compares it to the net present value (NPV) of building your own mine with tax credits and domestic sourcing premiums. Conservative energy policy emphasizes securing resources without relying on adversarial nations. This calculator equips landowners to negotiate aggressively while supporting national interests.

Royalty agreements deliver passive income but cede operational control. Self-development promises higher upside but requires capital, environmental bonding, and risk tolerance. Choosing the right strategy depends on ore grade, recovery rates, and market prices. With federal incentives encouraging domestic production, the calculus is shifting. This tool quantifies how tax credits, price premiums for American-sourced minerals, and escalating royalty rates influence long-term value.

Inputs reflecting market realities

Acreage and ore grade drive resource potential. Annual output and recovery rate determine how much saleable mineral reaches the market. Commodity prices may include a domestic premium if defense contractors or U.S. manufacturers agree to pay more for secure supply. Royalty offers often include upfront bonuses and escalators—percentage increases after a set number of years. Self-development capital costs include drilling, processing facilities, and infrastructure. Operating costs cover labor, energy, and environmental compliance.

Tax rates matter because self-development profits are taxable, while royalties are typically treated as passive income with depletion allowances. Discount rate reflects the owner’s required return. Environmental bonds ensure reclamation; some states allow bonds to be released once reclamation milestones are met. Domestic production credits, similar to those proposed in recent energy bills, offset capital costs. By combining these inputs, the calculator outputs net present value, payback periods, and breakeven prices.

Calculations under the hood

The calculator models annual production revenue by multiplying ore output by recovery rate, commodity price adjusted for domestic premium, and subtracting operating costs. For royalties, it applies the royalty rate to revenue and adds bonus payments in year one. After year five, it increases the royalty rate by the escalator for the remaining years. NPV is computed using the discount rate across the analysis horizon. For self-development, the model subtracts capital costs and environmental bonds in year zero, adds domestic tax credits, and calculates after-tax operating profit each year.

The calculator also computes payback period for self-development by tracking cumulative cash flow until it turns positive. Additionally, it outputs breakeven commodity price—the price required for self-development NPV to match royalty NPV. Users can adjust assumptions to see how price volatility or tax changes impact the decision.

Example: Rare earth deposit in Wyoming

A ranch family controls 1,200 acres with a rare earth deposit averaging 2.4% ore grade. A mining company offers a 14% royalty with a $600,000 bonus and a 3% escalator after year five. Projected output is 45,000 tons per year with 88% recovery. Current market price is $3,800 per ton, and buyers will pay a 6% domestic premium for secure supply. Self-development would require $120 million in capital, $1,250 per ton operating cost, and a $10 million environmental bond. The family expects a 9% discount rate and faces a 23% tax rate. Federal incentives provide $8 million in production tax credits.

Entering these inputs shows royalty income NPV of roughly $138 million over ten years, factoring in the escalator and bonus. Self-development NPV, after capital outlay, operating costs, taxes, and credits, reaches approximately $162 million with a payback in year six. Breakeven price—the point where both options equal—is about $3,420 per ton. Because domestic prices currently exceed that level and incentives reduce tax burden, self-development offers higher strategic value, albeit with more risk. The family could negotiate for a higher royalty or choose to partner with a domestic operator to retain control.

Comparison of development strategies

The table reveals how sensitive the decision is to price swings and royalty negotiations. A higher royalty makes leasing more attractive, while additional grants tilt the balance toward self-development. Landowners can adjust for inflation, additional environmental compliance, or scaling production up or down.

Limitations and due diligence

This calculator assumes constant production and pricing over the analysis period. In reality, commodity markets fluctuate, and ore grade may decline as the deposit depletes. Self-development models must include financing costs, permitting delays, and community relations. Tax treatment varies by state and mineral type; consult tax advisors to understand depletion allowances and intangible drilling cost deductions. Environmental regulations could increase bonding requirements or cap output.

Before committing to a strategy, obtain feasibility studies, third-party reserve estimates, and legal reviews of mineral rights. Engage engineers and geologists to validate recovery assumptions. The calculator provides a high-level comparison to support patriotic decision-making that prioritizes American energy independence while protecting family assets.