Canada-based Yamana Gold has agreed to divest a portfolio of royalty interests for total consideration of $65m to Guerrero Ventures.
The contingent payment is expected to be paid upon declaration of commercial production at the Deep Carbonates Project (DCP) at the Gualcamayo gold mine.
In addition, Guerrero Ventures has also signed agreements with funds related to Orion Resource Partners (USA), to acquire their portfolio of royalty, stream and gold loan assets for total consideration of $268m.
Guerrero chief executive officer Vincent Metcalfe said: “We are very proud to announce today the launch of Nomad Royalty Company, a new global acquisition-driven precious metals royalty company. Together with our partners, Orion and Yamana, we are excited to combine our significant transaction expertise to deliver a new generation royalty company and execute an aggressive growth plan.
“Our ambition is for Nomad to become a new leader in the mining industry through transparent and collaborative leadership that takes to heart the interests of all of its stakeholders.”
Guerrero will change its corporate name to Nomad Royalty
The Canadian gold producer said that the total consideration has been structured through a cash component of $20m and further value from a significant $45m share position in a newly created company.
In addition, Guerrero is expected to fund the cash component of the Yamana’s consideration through a combination of cash on hand and the proceeds from a proposed private placement of subscription receipts.
The transaction is expected to complete in the second quarter of 2020, subject to standard closing conditions, including approval of the TSX Venture Exchange.
Once the transaction is closed, Guerrero will change its corporate name to Nomad Royalty. Orion and Yamana would hold approximately 77% and 13% of the outstanding shares of Nomad, on a pro forma basis.
The new company Nomad is a pure-play precious metals royalty firm with potential upside through mineral resource expansions and mine life extensions.
