Diversified natural resource company Glencore has divested its 50% stake in base metals-focused streaming and royalty company BaseCore Metals to Sandstorm Gold for a total consideration of $525m.
BaseCore is owned equally owned by Glencore and Ontario Teachers’ Pension Plan Board (OTPP).
Sandstorm Gold acquired nine royalties and one stream from BaseCore Metals by making a $425m cash payment and issuing $100m in Sandstorm common shares. This resulted in Glencore holding a 5% stake in Sandstorm.
Created in 2017 as a joint venture limited partnership, BaseCore is engaged in providing long-term financing to mining operators to support exploration and development, mine expansions, mergers and acquisitions, balance sheet flexibility and reclamation obligations.
Sandstorm president and CEO Nolan Watson said: “The closing of the BaseCore transaction is the first part of an exciting new chapter for Sandstorm.
“The addition of this royalty package will contribute meaningful immediate and long-term growth to the company’s portfolio and help position Sandstorm as the go-to mid-tier royalty company.”
Glencore is expected to receive around $300m in cash and Sandstorm shares for its 50% stake in BaseCore. This includes retained cash on the balance sheet, which is planned to be distributed to Glencore.
RBC Capital Markets served as financial advisers for BaseCore and its limited partners for the transaction while Fasken Martineau acted as legal advisers.
In May 2022, Sandstorm Gold and Equinox Gold set up a new diversified metals royalty firm, Sandbox Royalties Corp, with assets in the Americas and Europe.