Fred Bell, President and CEO of Elemental Royalties (TSX.V:ELE – OTCQX:ELEMF), joins us to discuss the big news out March 17th that it has entered into a gold purchase and sale agreement with Rambler Metals and Mining PLC (AIM: RMM), the owner of the Ming Copper-Gold Mine in Newfoundland and Labrador in Canada. We discuss the deal terms, and why this first streaming deal for Elemental Royalties is solid acquisition and compliments the other 6 cash-flowing and producing royalty assets.
As part of the transaction, there was a C$14 million financing announced that brought in the new strategic shareholder, La Mancha Fund SCSp, a Luxembourg-based deep value fund very active in the mining sector. Fred outlines why is a net positive to have a strong strategic partner in the La Mancha Fund, and they will now become 10% stakeholders in ELE. This financing was at a 14% premium to the hostile takeover bid received from Gold Royalty Corp (NYSE: GROY), and further underpins why management of Elemental Royalties has messaged to the marketplace that they are not inclined to vote towards accepting the offer for a number of factors seen as inadequate in that bid which expires in April.
We wrap up with a review of the Company’s pipeline of cash-flowing assets which are very hard to come by in this competitive market, and that they have a great deal of growth over the next few years that has not been daylighted yet in the current valuation. Fred unpacks the two largest royalties being the Karlawinda Gold Mine Royalty operated by Capricorn Metals (ASX.:CMM), which will almost double the Company’s royalty revenue with a mine life of over 10 years, and then the key long-life Wahgnion Gold Project Royalty operated by Endeavour Mining (TSX: EDV). Fred also outlined the expected revenues to start by the second half of 2022 at the Mercedes Mine Royalty, that just changed hands from Equinox (NYSE: EQX) to Bear Creek Mining (TSX.V: BCM) and the Mt Pleasant Royalty operated by Zijin Mining (OTC: ZIJMF) that is starting to mine from their royalty concession this year.
If you have any follow up questions for Fred about Elemental Royalties, then please email us at either Fleck@kereport.com or Shad@kereport.com.
Click here to visit the Elemental Royalties website and read over both news releases we discussed.