The C$0.08-a-share all-cash offer that Lithium Royalty Corp (LRC) made for TNR Gold is “opportunistic, ‘low-ball’ and financially inadequate”, the takeover target said in a statement on Tuesday.

LRC made an unsolicited offer to the board on September 29, stating that its proposal was a 45% premium to TNR’s closing share price on September 28, and ten times the total cumulative volume traded over the last 12 months.

TNR responded in its statement that the offer represented only a small premium to its closing price of C$0.0725 a share on September 29.

“We welcome this opportunity for increased attention on our fantastic company and we believe shareholders and investors will see that the current share price of TNR deeply undervalues the company.

“Given that LRC valued only a portion of the company at $9-million, based on its purchase in February 2023 of the 0.5% net smelter return (NSR) royalty involving the Mariana Lithium project in Argentina for $9-million, the offer of C$15-million for the entire company is considered opportunistic and inadequate,” said TNR CEO and executive chairperson Kirill Klip.

TNR retains a 1.35% NSR on the Mariana Lithium project that is being developed by Ganfeng Lithium, and it holds a 0.36% NSR royalty on the Los Azules copper project, which is being developed by McEwen Mining in Argentina.

TNR also holds a 7% net profits royalty holding on the Batidero I and II properties of the Josemaria project that is being developed by Lundin Mining, in Argentina.

Klip said that the board was engaging with multiple parties proposing much higher potential valuations for its assets than the present LRC proposal.

“We have to wonder if LRC’s low-ball offer reflects its own declining share price over 2023.”

“The shareholders of TNR have known me for over 16 years of my tenure with TNR, they trust our board of directors and management. They know us and we know our shareholders. Other major shareholders do not agree to sell their holdings of TNR at this very low valuation of our assets.  We have spoken with numerous shareholders. They know the true potential of the company’s assets and the bright potential for our company.

“There is no alignment with LRC. The TNR team and its shareholders have been supporting the company through all these years even during the darkest days of the worldwide pandemic. We have built this strong, viable portfolio of assets including royalties in world-recognized projects containing lithium, copper, gold and silver, under the management of such industry leaders as Rob McEwen, McEwen Mining, Rio Tinto, Stellantis, Ganfeng Lithium and Lundin Mining.

“This opportunistic hostile takeover attempt of TNR, following LRC’s partial royalty purchase earlier this year, is very disappointing, much like the LRC poor share performance after its IPO this year,” said Klip.

He added that TNR had been engaged with LRC since January 2022 and had engaged in many discussions with it about possible transactions. The lead-up to the partial Mariana royalty purchase in February 2023 started between TNR and LRC in January 2022, and the only prior non-specific proposal from LRC was a non-binding offer of $0.085 a share in July 2023. The company rejected the non-binding offer in July, stating that it undervalued TNR.