Royalty investment firm Royalco Resources has vowed to slash costs following the recent exit of its executive chairman and company secretary.

Royalco (ASX:RCO) plans to drastically reduce its cash operating costs from around $1 million in the 2017 financial year to $300,000 to $400,000 annually.

Instead of handing over cash for equity, royalty investors lend money for a guaranteed percentage of revenue once resources are produced and sold.

Royalco has royalty interests in seven precious and base metal projects and one hydrocarbon project — the Weeks project in the Bass Strait, which is its main cash generator.

The Weeks royalty, which is expected to generate roughly $546,000 in the 2018 financial year, covers 20 producing fields in the offshore Gippsland Basin that are owned by ExxonMobil and BHP Billiton.

Earlier this year, shareholders expressed concerns that Royalco’s cost base was too high and cash was not being returned to investors.

This led to an attempted board spill by some shareholders and a failed takeover by fellow royalty investment firm Fitzroy River.

Fitzroy fell short, managing to acquire a 46.6 per cent stake. The remaining 44.4 per cent is held by three other substantial shareholders.

Peter Topham stepped down from the roles of executive chairman and CEO early in September, while Nick Boicos resigned as company secretary in October. Royalco did not say why the pair left, saying only that another CEO would not be appointed at the time. Justin Clyne took up the role of company secretary.

Royalco has spent the past six months working on reducing operating costs and reviewing its portfolio of royalty interests.

The company warned that its financial performance for the current year will be “adversely affected” by one-off costs including the cost of redundancies and payout of entitlements.

At the end of the September quarter, Royalco had about $2.28 million in the bank and a burn rate of $361,000. The company estimated its cash burn for the December quarter would reduce to $250,000.

Royalco is mulling its options for further costs cuts, including delisting from the ASX and a potential buyback.

“The board would like to further reduce Royalco’s operating costs,” the company said in statement.

“However, it is difficult to see any significant further reductions while the company remains listed on the ASX.”

Royalco has been contacted for comment.