- AustraliaNorth AmericaWorld
Investing News NetworkYour trusted source for investing success
- Lithium Outlook
- Oil and Gas Outlook
- Gold Outlook Report
- Uranium Outlook
- Rare Earths Outlook
- All Outlook Reports
- Top Generative AI Stocks
- Top EV Stocks
- Biggest AI Companies
- Biggest Blockchain Stocks
- Biggest Cryptocurrency-mining Stocks
- Biggest Cybersecurity Companies
- Biggest Robotics Companies
- Biggest Social Media Companies
- Biggest Technology ETFs
- Artificial Intellgience ETFs
- Robotics ETFs
- Canadian Cryptocurrency ETFs
- Artificial Intelligence Outlook
- EV Outlook
- Cleantech Outlook
- Crypto Outlook
- Tech Outlook
- All Market Outlook Reports
- Cannabis Weekly Round-Up
- Top Alzheimer's Treatment Stocks
- Top Biotech Stocks
- Top Plant-based Food Stocks
- Biggest Cannabis Stocks
- Biggest Pharma Stocks
- Longevity Stocks to Watch
- Psychedelics Stocks to Watch
- Top Cobalt Stocks
- Small Biotech ETFs to Watch
- Top Life Science ETFs
- Biggest Pharmaceutical ETFs
- Life Science Outlook
- Biotech Outlook
- Cannabis Outlook
- Pharma Outlook
- Psychedelics Outlook
- All Market Outlook Reports
As of 12:11 p.m. EST, Gold Royalties’ share price was up 70 percent, to $0.18, on news that Sandstorm Gold will be acquiring the company.
Both companies announced the deal on Wednesday. Under the terms of the arrangement, Gold Royalties shareholders will receive 0.045 of a Sandstorm share for each Gold Royalties share held, with each Gold Royalties share being valued at roughly $0.20 per share. That’s a 70-percent premium to the 20-day volume-weighted average trading price (C$0.118), and an even higher premium to Tuesday’s close of $0.105.
According to Sandstorm’s release, based on Sandstorm’s February 17 closing price, the transaction has a value of roughly C$5.7 million.
No doubt Ryan Kalt, CEO of Gold Royalties, is pleased with the news. “Despite a challenged equity market for junior mining, Gold Royalties has successfully built a substantial portfolio of valuable gold royalty assets in Canada,” he said in a company release on Wednesday. “Not only does the agreement with Sandstorm provide a tremendous premium for our shareholders, but equally important, it is structured such that our shareholders continue to have exposure to not only our existing gold royalty assets but also to the diversified and growing royalty portfolio held by Sandstorm.”
Gold Royalties believes the deal provides “substantial benefits” to shareholders, and it certainly appears that the market agrees — in addition to a rising share price, the company saw a significant spike in trading volume on Wednesday, with roughly 1.14 million shares trading hands compared to a daily average of just 38,000.
Attracting Sandstorm to Gold Royalties was its portfolio of 18 royalties on 13 mining projects in Canada, as well as the fact that the company has about C$2 million in cash. That will bring Sandstorm’s portfolio to 10 streams and 59 royalties following the closing of the transaction.
Sandstorm seems to be on a roll lately, as its acquisition of Gold Royalties comes just a few weeks after it secured royalties on 10 projects in Africa and Nevada. The royalty company sold eight of its Nevada properties to Tarsis Resources (TSXV:TCC) for 1.5 million shares of Tarsis as well as net smelter royalties (NSRs) of 2 to 3 percent on each of the properties, acquired a royalty on Orezone Gold’s (TSX:ORE) Bombore project in Burkina Faso and made an agreement for an NSR on Castle Peak Mining’s (TSXV:CAP) Akorade project in Ghana.
The Sandstorm/Gold Royalties deal isn’t the only merger that’s happened this week in the gold space either — on Tuesday, Timmins Gold (TSX:TMM,NYSEMKT:TGD) announced that it will be acquiring Newstrike Capital (TSXV:NES).
Certainly, despite a poor performance from gold prices, investors will be keeping an eye out for further action from gold companies.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Related reading:
Sandstorm Gold Gains on Announcement of 10 New Royalties
Timmins to Create Intermediate Gold Miner with Newstrike Acquisition
Latest News
Investing News Network websites or approved third-party tools use cookies. Please refer to the cookie policy for collected data, privacy and GDPR compliance. By continuing to browse the site, you agree to our use of cookies.