Royal Gold Completes Acquisition of Great Bear Royalties Corp.
September 09 2022 - 7:30AM
Business Wire
Royal Gold, Inc. (NASDAQ: RGLD) (together with its
subsidiaries, “Royal Gold” or the “Company,” “we” or “our”)
announced today that its wholly owned subsidiaries, International
Royalty Corporation (“IRC”) and 1370553 B.C. Ltd (“Newco”), have
completed the previously announced plan of arrangement (the
“Arrangement”) to acquire all of the issued and outstanding shares
of Great Bear Royalties Corp. (“GBR”).
“I am pleased to announce the closing of this friendly
transaction with Great Bear Royalties Corp.,” commented Bill
Heissenbuttel, President and CEO of Royal Gold. “The acquisition
provides Royal Gold exposure to Canada’s newest major gold
discovery, the Great Bear Project, and furthers our strategic
objective of acquiring quality, long lived assets with excellent
operators in favorable jurisdictions.”
Under the terms of the Arrangement, Newco paid cash
consideration of C$6.65 for each GBR common share for aggregate
consideration of approximately C$199.5 million (approximately
US$152.2 million). The shares of GBR are expected to be delisted
from the TSX Venture Exchange at the close of business on September
12, 2022. Following the delisting, Royal Gold intends to apply for
GBR to cease to be a reporting issuer under applicable Canadian
securities laws.
Great Bear Royalty Details
GBR’s sole material asset is a 2.0% net smelter return royalty
(the “Royalty”) that covers the entirety of the Great Bear Project
in the Red Lake district of Ontario, Canada, indirectly owned and
operated by Kinross Gold Corporation (“Kinross”). The Royalty
includes all metals produced from contiguous claims covering 9,140
hectares and will be registered on title to the relevant claims.
Royalty payments will be made quarterly with applicable standard
deductions.
As part of IRC’s due diligence, IRC entered into a co-operation
agreement with Kinross in May 2022, which provided IRC with access
to Kinross personnel and certain non-public information pertaining
to the Great Bear Project. Kinross subsequently provided a project
update in June 2022, which included an in-depth overview of their
work to date and plans for the project.
In exchange for the information and access provided by Kinross
under the co-operation agreement, IRC agreed that upon the
acquisition of GBR, GBR would amend certain terms of the royalty
agreement and provide an option to Kinross to purchase a 25%
interest in the Royalty (0.5% of the 2.0% royalty rate) for an
amount equal to 25% of IRC’s purchase price of GBR, adjusted for
inflation, at any time from the transaction closing date until the
earlier of a construction decision for the Great Bear Project and
10 years after the transaction closing date. GBR and Kinross
entered into definitive documents for the royalty amendment and
purchase option immediately following the closing of the
acquisition of GBR. The Royalty is not subject to any other
stepdowns or caps that could reduce the royalty rate in the
future.
For more information on the Royalty and the Great Bear Project,
see the Company’s press release dated July 11, 2022.
Corporate Profile
Royal Gold is a precious metals stream and royalty company
engaged in the acquisition and management of precious metal
streams, royalties and similar production-based interests. As of
June 30, 2022, the Company owned interests on 185 properties on
five continents, including interests on 41 producing mines and 19
development stage projects. Royal Gold is publicly traded on the
Nasdaq Global Select Market under the symbol “RGLD.” The Company’s
website is located at www.royalgold.com.
Forward-Looking Statements: This press release includes
“forward-looking statements” within the meaning of U.S. federal
securities laws. Forward-looking statements are any statements
other than statements of historical fact. Forward-looking
statements are not guarantees of future performance, and actual
results may differ materially from these statements.
Forward-looking statements are often identified by words like
“will,” “may,” “could,” “should,” “would,” “believe,” “estimate,”
“expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,”
“continue,” “project,” or negatives of these words or similar
expressions. Forward-looking statements include, among others:
statements about the benefits of the acquisition; our objective of
acquiring quality, long lived assets with excellent operators in
favorable jurisdictions; the timing of the delisting of the shares
of GBR; our application to deregister GBR as a reporting issuer
under applicable Canadian securities laws; registration on title of
the Royalty; and the timing of royalty payments.”
Forward-looking statements are based on current expectations,
estimates and assumptions that involve a number of risks and
uncertainties that could cause actual results to differ materially
from those projected. The risks and uncertainties that could cause
actual results to differ materially from those in forward looking
statements include, without limitation: the risk that any
announcement relating to the transaction could have adverse effects
on the market price of Royal Gold’s common stock; the risk of
litigation related to the transaction; the diversion of management
time from ongoing business operations due to acquisition-related
issues; the volatility in commodity price for gold; competition,
government regulation or other actions; public health crises, such
as pandemics (including COVID-19) and epidemics, and any related
government policies and actions; the ability of Kinross to execute
its plans for the Great Bear Project; Kinross’ ability to identify
and mitigate the risks and hazards inherent in operating the Great
Bear Project; and other risks detailed in Royal Gold’s annual
reports on Form 10-K for the six-month transition period ended
December 31, 2021, available on Royal Gold’s website at
royalgold.com and on the Securities and Exchange Commission website
at http://www.sec.gov. Other unpredictable or unknown factors not
discussed in this release could also have material adverse effects
on forward looking statements.
Forward-looking statements speak only as of the date on which
they are made. We disclaim any obligation to update any
forward-looking statements, except as required by law. Readers are
cautioned not to put undue reliance on forward-looking
statements.
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For further information, please contact: Alistair Baker
Vice President Investor Relations and Business Development (720)
554-6995
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