Gold Royalty Corp. is a gold-focused royalty company offering creative financing solutions to the metals and mining industry


Gold Royalty to acquire Elemental Royalties. (Credit: Michael Gaida from Pixabay.)

Gold Royalty Corp. (NYSE American: GROY) (“Gold Royalty” or the “Company”) announces its intention to pursue an offer to acquire all of the outstanding common shares (the “Elemental Shares”) of Elemental Royalties Corp. (TSXV: ELE) (“Elemental”) for consideration consisting of 0.27 common shares of Gold Royalty (the “Gold Royalty Shares”) in exchange for each Elemental Share (the “Offer”).

The Offer values Elemental at C$1.78 per share and represents a premium of 37% to Elemental shareholders based upon the closing prices of the Elemental Shares on the TSX Venture Exchange and the Gold Royalty Shares on the NYSE American on December 17, 2021, being the trading day immediately prior to this announcement. The Offer implies a total equity value for Elemental of approximately C$130 million on a fully diluted, in-the-money basis, and Elemental shareholders are expected to own approximately 12% of the combined entity upon completion of the transaction.

David Garofalo, Chairman, President and CEO of Gold Royalty, commented: “We believe the proposed transaction represents a compelling opportunity for both companies. With 200 royalties, covering all stages of development and production, a strong balance sheet, enhanced market visibility and critical mass, the combined company will be well-positioned for continued growth in today’s increasingly competitive royalty landscape. Accordingly, we believe that this transaction is in the best interests of the shareholders of both Elemental and Gold Royalty, which is why we intend to take the Offer directly to Elemental shareholders.”

Full details of the Offer will be included in a take-over bid circular and letter of transmittal and notice of guaranteed delivery (collectively, the “Offer Documents”) to be filed with applicable Canadian securities regulatory authorities and mailed to Elemental shareholders. Gold Royalty will request a list of shareholders from Elemental and expects to commence and mail the Offer Documents as soon as reasonably practical upon receipt of this list. The Offer will be open for acceptance for 105 days following commencement thereof.

The Offer will be subject to certain customary conditions of completion, including, among others: there having been validly deposited under the Offer, and not withdrawn, that number of Elemental Shares representing more than 50% of the outstanding Elemental Shares, excluding those Elemental Shares beneficially owned, or over which control or direction is exercised, by Gold Royalty or by any person acting jointly or in concert with Gold Royalty; there having been validly deposited under the Offer and not withdrawn that number of Elemental Shares representing at least 66 2/3% of the outstanding Elemental Shares (calculated on a fully diluted basis), excluding Elemental Shares held by Gold Royalty; receipt of all necessary regulatory approvals; customary approval of the NYSE American in relation to the issuance and listing of the additional Gold Royalty Shares under the Offer; and the absence of material changes to the business of Elemental.

Gold Royalty initially submitted a premium acquisition proposal to Elemental on October 21, 2021, with the objective of working collaboratively with Elemental to negotiate a mutually-beneficial, board-supported transaction. Gold Royalty submitted a further proposal to Elemental on December 15, 2021 and has attempted on several occasions to engage in discussions with Elemental and its board of directors. In the absence of any constructive engagement from Elemental in response to Gold Royalty’s bona fide, premium proposals, Gold Royalty now intends to take its Offer directly to Elemental shareholders. The proposed Offer is based exclusively on publicly available information.

Gold Royalty has engaged CIBC World Markets Inc. to act as its financial advisor in connection with the Offer and has engaged Sangra Moller LLP to act as its legal advisor in Canada and Haynes & Boone LLP to act as its legal advisor in the United States.

Laurel Hill Advisory Group has been engaged by Gold Royalty to act as its information agent and strategic communications advisor in connection with the Offer.

Source: Company Press Release