Acquisition of Ely Gold Royalties Creates Opportunity for Speculators

 

Gold Royalty Corp. (NYSE-American: GROY) — currently trading around US$4.50 per share — has announced that Ely Gold Royalties (TSX-V: ELY) shareholders have overwhelmingly approved and authorized a previously announced business combination between the two companies.

Pursuant to the amalgamation, Gold Royalty — which was spun out of GoldMining Inc. (TSX: GOLD)(NYSE-American: GLDG) in March of this year via IPO — will acquire all of the issued and outstanding shares of Ely Gold.

Upon completion of the acquisition, Gold Royalty will significantly add to its already robust base of royalties, including Ely’s flagship royalties at Jerritt Canyon, Goldstrike, and Marigold — three of Nevada's largest gold mines — as well as the Fenelon mine in Quebec operated by Wallbridge Mining.

Ely Gold additionally brings with it a large stable of Nevada-based royalties comprising dozens of producing, development, and exploration assets.

Gold Royalty also recently announced a definitive agreement with Monarch Mining to acquire five royalties in Quebec’s Abitibi greenstone belt for total cash consideration of C$15 million.

Monarch is in the process of reopening the Beaufor mine which boasts past production of 1 million-plus gold ounces at an average grade of 7.50 grams per tonne. The royalty is projected to start cash flowing next year, which should translate to a relatively quick payback for Gold Royalty as Monarch aims for a production restart in June 2022. 

Post-acquisition, Gold Royalty will hold more than 100 royalties across the Americas and is well on its way to accomplishing its stated objective of becoming a leading royalty and streaming company with a focus on acquiring producing assets in Tier-1 jurisdictions.

Remember, the royalty and streaming model offers a number of key advantages including:

  • Leverage to commodity prices
  • Fixed operating & cash costs and strong margins
  • Exploration & mine expansion upside
  • No capex or cost overrun exposure
  • No limit to growth as execution of risk does not rise with each acquisition

Newly-launched and with only 41.6 million pre-acquisition shares outstanding and a market cap below US$200 million, Gold Royalty is off to an impressive start as it lays the early groundwork of becoming a leading royalty and streaming company in the sub-US$1 billion category.

Our feature report on Gold Royalty is available here. 

Yours in profits,

 

Mike Fagan

Mike Fagan
Editor, Resource Stock Digest


Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad, Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest and Hard Asset Digest readers.