Business
Gold Royalty Issues Letter to Elemental Royalties Shareholders and Enters Into Commitment Letter with Bank of Montreal and CIBC
Elemental shareholders who have questions or need assistance tendering their shares can contact Laurel Hill Advisory Group at 1-877-452-7184 or by e-mail at ass
About this update from Gold Royalty Corp.
[{"type":"text","content":" Elemental shareholders who have questions or need assistance tendering their shares can contact Laurel Hill Advisory Group at 1-877-452-7184 or by e-mail at [email protected]. VANCOUVER, BC, March 30, 2022 /CNW/ - Gold Royalty Corp. (NYSE American: GROY) (\"Gold Royalty\" or the \"Company\") today issued a letter to Elemental Royalties Corp. (\"Elemental\") shareholders reinforcing that a combination with Gold Royalty is the best option available to them. The letter, which can be found here (https://www.goldroyalty.com/Letter-to-Shareholders.pdf), emphasizes Gold Royalty's belief that the combined company would be well-positioned to grow in a highly competitive royalty landscape, while Elemental on a standalone basis has limited growth prospects. In particular: The results of Elemental's \"strategic review\" have been underwhelming. Elemental's only recent acquisition is a gold stream on the Ming Copper Mine, a relatively small scale and high-cost operation that has a history of failing to meet expected project milestones. Elemental is raising capital at a lower price than Gold Royalty's offer. Elemental recently announced a financing at C$1.51 per share – significantly below the unaffected C$1.78 value of Gold Royalty's offer at announcement, which Elemental's Board had characterized as undervalued at the time. Elemental's high-cost debt remains an issue. Elemental is spending US$2.5 million per year to service a US$25 million credit facility with an interest rate of approximately 10%. This hinders Elemental's strategic flexibility and ability to return cash flow to shareholders. The letter goes on to detail the benefits of combining with Gold Royalty, including: Creation of a sector leading portfolio, with over 200 royalties across cash flowing, development, and exploration assets focused within Tier 1 jurisdictions. An industry-leading revenue growth profile. According to current analyst consensus estimates, the revenue profile of the combined business would be approximately US$18 million in 2023 and could reach approximately US$40 million by 2027. Significantly enhanced trading liquidity. Gold Royalty averaged approximately US$3.2 million of daily trading liquidity over the six months ended December 17, 2021. Elemental averaged approximately US$62,000 over the same period. A sustainable dividend. Gold Royalty's...