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Three Way Amalgamation: Gold Royalty To Acquire Abitibi Royalties, Golden Valley Mine And Royalties

Consolidation is evidently well underway in the mining royalty space. This morning, it was announced that Gold Royalty (NYSE: GROY),
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This article was originally published by The Deep Dive

Consolidation is evidently well underway in the mining royalty space. This morning, it was announced that Gold Royalty (NYSE: GROY), Abitibi Royalties (TSXV: RZZ) and Golden Valley Mines and Royalties (TSXV: GZZ) have agreed to come together to form what has been referred to as a leading Americas-focused previous metals royalty company.

The proposed three-way amalgamation will see Gold Royalty acquire both Abitibi Royalties as well as Golden Valley, presumably as a result of its top-level exchange listing. Upon closing, current Gold Royalty shareholders will own 54% of the resulting company, while each of Abitibi Royalties and Golden Valley will see their shareholders own 23% on a fully diluted basis.

Under the terms of the arrangement, Abitibi Royalties shareholders will receive 4.6119 Gold Royalty shares for each share currently held, implying a 22% premium to current pricing. The price implies $25.33 per share in consideration.

Golden Valley shareholders meanwhile will receive an 86% premium to their current valuation, receiving 2.1417 Gold Royalty shares for each share held, implying consideration of $11.76 per share. The increased premium is reportedly a result of the firms current stake in Abitibi Royalties, combined with its own assets.

The resulting firm is expected to have a portfolio consisting of 191 total royalties, which includes royalties on six cash flowing operating mines, and seven from mines that are expected to see near term production. The bulk however, at 137, consist of early stage exploration royalties. The firm is also to have an expected cash position of $47.0 million and no debt.

The transaction is expected to close in the fourth quarter following the required shareholder approvals.

Gold Royalty last traded at $4.39 on the NYSE.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Gold Royalty To Acquire Abitibi Royalties, Golden Valley Mine And Royalties appeared first on the deep dive.

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