Cardinal Resources Limited. CRDNF

Franco Nevada pays $US 150 mill for 1.5% NSR beats Nordgold

[phoenix_trader]

With $150 mill in hand, Cardinal can finance the $240 mill balance cost of Namdini. With less than 1 year payback, possibly hedged to assure, why sell to Nordgold for $AUS .45, makes no sense. The Ghana government apparently wants this mine to kickstart Northern Ghana.





Franco-Nevada Corp. has entered into an agreement with SolGold PLC to acquire a 1-per-cent net smelter royalty with reference to all minerals produced from the Alpala copper-gold project in northern Ecuador for $100-million (all amounts in this news release are in United States dollars, unless otherwise noted). The Alpala project is owned by Exploraciones Novomining SA, which is held 85% by SolGold and 15% by Cornerstone Capital Resources Inc. The NSR will cover the 4,979 hectare Cascabel concession and closing of the acquisition is subject to on-site confirmatory due diligence which will be completed once COVID-19 travel restrictions are lifted. In the interim, the Corporation has agreed to provide SolGold with a bridge loan of $15 million for a period of up to 8 months.

SolGold has the option to increase the size of the transaction to $150 million for a 1.5% NSR until January 11, 2021 and also has the option to buy-back 50% of the NSR for a period of time. Franco-Nevada is entitled to receive certain minimum royalty payments from 2028 and also has the option to convert the NSR to a gold NSR for a period of time after Alpala is producing.

[lumpy13]

The 45 cents offer by Nordgold was a low ball attempt and not taken seriously. As Cardinal opened up the data room to them, a more serious price has to be in discussion or Cardinal wouldn't have been amenable to sharing information. My sense is that mgmt would prefer an acquisition, but will also look at mine construction and is considering options for that.