RE: Royalty Power and Stock Value-?Gbb Future The following could be the future of several viable and advanced junior explorers.
Gbb could split into Gbb Mining +Gbb Royalty.
Gbb mining could be the Exploration and Mining company for Granada and Castle Silver.
Gbb Royalty could hold title to a fixed amount of Gold in the Ground like other royalty co.'s.
For that matter, Gbb could hold Royalty on Castle Silver assets too !
Gbb Royalty can be valued at higher multiple like other commodity royalty co.'s.
It can attract greater investor demand by holding title to the gold in the ground.
It can assume some debt and leverage itself like Premier Royalty.
Look at Premier Gold as a variation on the split. They folded their royalties into a shell, Bridgeport Ventures,
renamed it Premier Royalty (NSR.to ) …, and then Premier Gold retained over 50% control with perks like first right of refusal for certain activities of Premier Gold, and mutually beneficial financing.
Whats interesting is the leverage of a Royalty company and market multiple. Premier Royalty is able to carry about 28 m in debt ?
and was able to announce a 30m dollar bought deal in December at 2$ per share with very little current earnings, as most of their royalties are not producing ( yet?) . Approx 63 m ? shares trading at $2 - not bad eh!
Lets cross our fingers !
" | Premier Royalty Corporation
In November 2011, Premier made the decision to optimize the value of its royalty portfolio by forming a royalty subsidiary with the intent of creating Canada's next gold focused royalty company, led by Abraham Drost. Since this decision, Premier Royalty Corporation (PRC) has entered into agreements to acquired four producing royalties in addition to Premier's Emigrant Mine and other royalties. A definitive agreement with Bridgeport Ventures Inc. will result in a business combination pursuant to which Bridgeport will acquire PRC. Upon "Closing" of this agreement, Premier Gold Mines Limited will become PRC's largest shareholder. As the company grows, Premier will have the option to either use this position as a non-dilutive financing mechanism or then dividend this ownership to shareholders. This agreement is expected to close in the fourth quarter of 2012.
Premier Gold believes that consolidating existing royalties owned by the Company combined with the acquisition of other high quality cash flowing royalty assets will form the basis of a transaction that is value accretive to Premier Gold shareholders." |