merger Vancouver, British Columbia--(Newsfile Corp. - June 21, 2021) - Gold Royalty Corp. (NYSE American: GROY) ("GRC") and Ely Gold Royalties Inc. (TSXV: ELY) (OTCQX: ELYGF) ("Ely Gold") are pleased to announce that they have entered into a definitive agreement (the "Agreement"), dated June 21, 2021, pursuant to which GRC will acquire all of the issued and outstanding common shares of Ely Gold (the "Ely Shares") by way of a statutory plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia).
Under the terms of the Agreement, which was negotiated at arms-length, each holder of Ely Shares will have the option to receive consideration per Ely Share of either: (i) C$1.46 in cash, or (ii) 0.2450 of a GRC common share ("GRC Share"), subject to pro-ration based on a maximum aggregate cash consideration of C$84 million and a maximum aggregate number of GRC Shares issued ofapproximately41.5million.
The share exchange ratio implies a mix of C$0.42 in cash plus 0.1742 of a GRC Share per Ely Share on a fully diluted, in-the-money, and fully pro-rated basis (assuming the maximum aggregate cash consideration of C$84 million). Such consideration represents a premium of approximately 42%[1] to Ely Gold shareholders based on the 30-day volume weighted average price of the GRC Shares and Ely Shares ending on June 18, 2021. At closing, assuming maximum aggregate cash consideration of C$84 million, existing GRC and Ely Gold shareholders will own approximately 55% and 45%, respectively, of GRC after giving effect to the Arrangement ("New GRC") on a fully diluted, in-the-money, and fully-prorated basis.
Transaction Highlights
- Creation of a Leading Growth and Americas-Focused Precious Metals Royalty Company - the transaction creates a new, sizable Americas-focused royalty company with a peer-leading resource endowment and a robust development pipeline, including nearly 100 royalties on various production, near-production, development and exploration assets.
- Clear Path to Share Price Re-Rate - New GRC will have increased scale, diversification and growth, which may catalyze a significant share price re-rating benefiting all shareholders of New GRC.