Sandstorm Gold to buy Gold Royalties for C$5.7m
TORONTO (miningweekly.com) – Merger and acquisition activity in the mining space continued on Wednesday with precious metals streaming firm Sandstorm Gold agreeing to buy smaller rival Gold Royalties in an all-scrip deal worth about C$5.7-million.
This followed Tuesday’s announcement that Timmins Gold had agreed to buy fellow Mexico-focused explorer Newstrike Capital for about C$140-million, giving rise to an emerging intermediate gold mining company in the North American country.
The TSX-V-listed stock of Gold Royalties, which currently had about C$2-million in cash and a portfolio of 18 royalties on 13 mining projects located in Canada, including one royalty that was generating cash flow from gold production, jumped more than 75% after the companies jointly announced the transaction that would be undertaken by way of a statutory plan of arrangement.
The transaction would enhance Sandstorm’s portfolio to ten streams and 59 royalties.
Under the terms of the transaction, Gold Royalties shareholders would receive 0.045 of a Sandstorm share for each Gold Royalties share held, valuing Gold Royalties shares at about C$0.20 apiece, which represented a premium of 70% to the 20-day volume-weighted average trading price of about C$0.118.
Based on Sandstorm's closing share price on Tuesday, the total value of this transaction would be about C$5.7-million.
Warrant holders would be eligible to receive 0.045 of a Sandstorm share for each outstanding Gold Royalties warrant exercised, while each outstanding option to acquire Gold Royalties shares would also receive 0.045 of a Sandstorm share when it is exercised.
The arrangement was subject to the approval of at least two-thirds of the votes cast by Gold Royalties shareholders at a special meeting scheduled for April, as well as regulatory approval.
The company had agreed to pay Sandstorm a termination fee of C$200 000, should the arrangement not be completed under certain circumstances.
Sandstorm Gold had last month entered into no fewer than ten royalty agreements on properties in West Africa and Nevada, while it also sold eight of its Nevada properties to TSX-V-listed Tarsis Resources for 1.5-million shares of Tarsis, as well as net smelter royalties (NSRs) of 2% to 3% on each of the properties.
The company had also acquired a royalty on TSX-listed Orezone Gold’s Bombore project, in Burkina Faso, and struck an accord for an NSR on TSX-V-listed Castle Peak Mining’s Akorade project, in Ghana.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation